Padini cautiously optimistic despite challenges, proposes buyback

PETALING JAYA: Padini Holdings Bhd will continue to focus on cost discipline, prudent working capital management, and sustained investment in product quality and customer experience as it navigates an uncertain economic landscape.

In its 2026 annual report, the group said it expects the year ahead to be an “arduous journey riddled with uncertainties in all aspects”, given the unpredictable global environment and local challenges arising from inflation, which affects consumer purchasing power.

Padini chairman Datuk Lee Say Tshin said the company anticipates cost pressures from the full-year impact of the expanded sales and service tax on leasing and rental services, foreign-exchange volatility, and developments in the Middle East and international trade tensions, which could continue to affect input costs and consumer sentiment.

Nevertheless, Lee said the company remained cautiously optimistic.

“We believe our disciplined approach to cost management, continued focus on customer and product-centric innovation, and ongoing digital transformation will position the group well to navigate the current environment and deliver sustainable long-term value to our shareholders,” he said.

Padini is seeking shareholders’ approval to buy back up to 10% of its issued shares after its share price nearly halved from a peak of RM2.02 on Feb 11 this year.

The stock closed 4.95% higher last Friday at RM1.06.

In a Bursa Malaysia filing, the group said the proposed buyback would provide greater flexibility in managing its capital structure and financial resources, while enhancing shareholder value.

The mandate would enable Padini to repurchase shares when its directors deem the market price to be below their underlying value, subject to the group’s financial position and prevailing market conditions.

The proposed buyback is subject to shareholders’ approval at its AGM on Nov 25.

The fashion retailer is concentrating its efforts on further rationalising the retail business through streamlining processes, controlling operating costs and extending its sales channels.

It plans to refurbish 13 stores in Malaysia in financial year 2027 (FY27), including two which were temporarily closed for renovation and scheduled to reopen in the first quarter of FY27.

Strong emphasis will remain on productivity per square foot, space optimisation, and strengthening of eCommerce channels to reduce reliance on any single market or channel, Lee noted.

In its overseas markets, Padini said it will actively monitor market conditions and evaluate its business strategy on a regular basis to maximise returns.

The group’s eCommerce division is also continuing efforts to develop new online shopping experiences and improve convenience for customers.

“While we are still very much centred on the brick-and-mortar business, a lot of effort has been put in to grow our online business by increasing the awareness of our products in our online channels and improving the infrastructure for eCommerce,” it said.

However, the company said it does not expect significant contribution from its stores and online platforms in Cambodia and Thailand, online sales to Singapore, or mobile applications in FY27.

Despite this, it believes its digital retailing will bring a positive impact as a complementary business channel as well as for future growth.

In FY26, Padini had a full-year revenue of RM1.88bil, down from RM1.94bil in the previous year.

Net profit also declined to RM112.6mil, from RM154.79mil in FY25.

Lee noted that the group’s performance during the year was affected by a more challenging domestic retail climate, marked by intensifying competition, elevated operating costs and cautious consumer sentiment.