KUALA LUMPUR (Aug 28): Padini Holdings Bhd (KL:PADINI) fell to its lowest in nearly six years after an unexpected quarterly loss while analysts flag weak sales ahead for the apparel retailer.
At least two research houses downgraded their recommendations after results for the financial year ended June 30, 2026 (FY2026) fell short of the consensus expectations by more than 20%. Others cut target prices while TA Securities is placing its rating under review pending an analyst briefing.
“We expect near-term headwinds in the apparel retail environment from inflation and competition,” Kenanga Investment Bank said and lowered its recommendation to ‘market perform’ equivalent to ‘hold’.
Padini opened at RM1.29 before falling to RM1.18, a level last seen in March 2020. It pared some of its losses to close 14 sen, or 10.45% lower, at RM1.20 on Friday, valuing the company at RM1.18 billion. Some 9.5 million shares changed hands.
Shares of Padini, which also owns Vincci, Seed and PDI brands, have lost more than 30% of their value since the year began partly dragged by money-laundering investigations involving external third-party counterparties. The company has since been cleared by authorities with none of its directors or employees charged.
The consensus has also turned cautious on Padini with only three ‘buy’ and five ‘hold’ out of eight research houses tracked by Bloomberg. The average target price is RM1.58.
Sales momentum could stay weak in the July-September quarter amid global uncertainties and inflationary pressure on households, Maybank Investment Bank warned and cut its rating to ‘hold’.
Further, competition from various fashion e-commerce platforms may also be eroding Padini's market share, as budget-conscious consumers seek out fashion items at lower price points, the house said.
CIMB Securities, still bullish on the stock, said Padini will continue to benefit from current consumer “downtrading, supported by its mass-market-focused brand franchise”.
Padini’s current valuation is also undemanding while its robust net cash could support 6.2%-7.6% dividend yields, the research house noted in keeping the stock on ‘buy’ call.