KUALA LUMPUR (Nov 30): Padini Holdings Bhd’s net profit for the first quarter ended Sept 30, 2023 (1QFY2024) fell 45.4% to RM26.67 million, from RM48.86 million a year earlier, due to a drop in its gross profit margin from 39% to 36%.

In a bourse filing on Thursday, the company said that in addition, the drop in profit before tax was also partly attributed to rising staff cost.

It said revenue for the quarter rose to RM388.19 million, from RM379.09 million previously, due to an increase in sales volume.

Earnings per share slipped to 4.05 sen from 7.43 sen.

Padini declared an interim dividend of 2.5 sen per share to be paid on Dec 29.

On prospects, Padini said the retail business in general remains challenging, due to the deterioration in purchasing power, arising potentially from rising cost, trade tensions, and rising inflation and interest rates.

“However, supply chain issues, material costs and freight charges seem to have stabilised, although there may still be some further increases in the short term,” it said.

“Despite the potential challenges, we are optimistic in performing satisfactorily for the current financial year. Management will continue to provide value for money products and implement measures to control costs, optimise working capital, preserve cash and streamline the operations to minimise any adverse impacts,” it added.

Former banker redesignated chairman amid boardroom changes

Separately, the group announced a slew of changes in its boardroom, including the redesignation of its non-executive director, Datuk Lee Say Tshin as its new chairman effective Jan 1, 2024.

Meanwhile, two non-independent directors, Lee Peng Khoon and Chia Swee Yuen, will be departing the board from Dec 31, 2023. Both cited personal reasons for their departure.

Padini shares closed three sen or 0.79% lower at RM3.75, for a market capitalisation of RM2.47 billion. Year to date, the stock has climbed 37 sen or about 11%.