Eco-Shop poised for more growth after beating expectations
The group's core net profit rose 17 per cent to RM214 million on yearly basis, exceeding 105 per cent of RHB Research's full-year forecast.
Revenue grew 16 per cent to RM2.8 billion, supported by the addition of 74 net new stores during the year.
However, same-store sales growth dipped slightly by 0.4 per cent, with a sharper eight per cent decline in the fourth quarter following a price hike in April.
Despite a temporary dip in volume, GPM improved by 1.8 percentage points to 28.2 per cent, effectively offsetting the impact of increased operating costs, particularly from the higher national minimum wage.
RHB Research maintained its "Buy" call with a target price of RM1.51, implying a 12 per cent upside and a 2.0 per cent forecast dividend yield for financial year ending May 31, 2026.
The firm described Eco-Shop as a "scarce investment case" that offers earnings visibility and strong growth potential, supported by ongoing outlet expansion plans.
"Eco-Shop is focused on opening at least 70 new outlets pa in order to penetrate the underserved markets and consolidate its market leadership in the burgeoning dollar store industry.
"Meanwhile, it recently launched targeted marketing campaigns to drive footfall and same-store sales growth by leveraging on the elevated GPM," it added.
While sales volume has yet to fully recover following the April price increase, RHB Research said the dollar store model will remain attractive to value-conscious consumers once they adjust to the new pricing.
"On top of that, the group's participation in the Sumbangan Asas Rahmah programme, with 168 outlets approved and 81 stores enabled, could be another effective lever to lift foot traffic," it added.
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New Straits Times
11 hours ago
- New Straits Times
Eco-Shop poised for more growth after beating expectations
KUALA LUMPUR: Eco-Shop Marketing Bhd's financial year 2025 (FY25) results beat analyst expectations, buoyed by strong gross profit margin (GPM) expansion, reinforcing the group's solid positioning in Malaysia's fast-growing dollar store segment. The group's core net profit rose 17 per cent to RM214 million on yearly basis, exceeding 105 per cent of RHB Research's full-year forecast. Revenue grew 16 per cent to RM2.8 billion, supported by the addition of 74 net new stores during the year. However, same-store sales growth dipped slightly by 0.4 per cent, with a sharper eight per cent decline in the fourth quarter following a price hike in April. Despite a temporary dip in volume, GPM improved by 1.8 percentage points to 28.2 per cent, effectively offsetting the impact of increased operating costs, particularly from the higher national minimum wage. RHB Research maintained its "Buy" call with a target price of RM1.51, implying a 12 per cent upside and a 2.0 per cent forecast dividend yield for financial year ending May 31, 2026. The firm described Eco-Shop as a "scarce investment case" that offers earnings visibility and strong growth potential, supported by ongoing outlet expansion plans. "Eco-Shop is focused on opening at least 70 new outlets pa in order to penetrate the underserved markets and consolidate its market leadership in the burgeoning dollar store industry. "Meanwhile, it recently launched targeted marketing campaigns to drive footfall and same-store sales growth by leveraging on the elevated GPM," it added. While sales volume has yet to fully recover following the April price increase, RHB Research said the dollar store model will remain attractive to value-conscious consumers once they adjust to the new pricing. "On top of that, the group's participation in the Sumbangan Asas Rahmah programme, with 168 outlets approved and 81 stores enabled, could be another effective lever to lift foot traffic," it added.
Malaysian Reserve
a day ago
- Malaysian Reserve
Eco-Shop's 4Q profit slips 10% on higher costs, but FY2025 earnings rise 17%
Eco-Shop Marketing Bhd posted a 10.1% year-on-year decline in adjusted net profit for the fourth quarter ended May 31, 2025 (4Q25), as higher expenses from store expansion, wage hikes and IPO-related costs offset revenue gains. Net profit — excluding one-off listing expenses — fell to RM57 million from RM63.4 million a year earlier, the group said in a filing. This came as selling, distribution and administrative expenses surged 65.1% to RM155.4 million, driven by network growth, the full-quarter impact of the Feb 1 minimum wage revision, and listing-related fees of RM7.6 million. Quarterly revenue, however, rose 7.5% year-on-year to RM689 million, supported by the net addition of 22 new stores and a pricing revision introduced in mid-April, which raised product prices to RM2.60 in Peninsular Malaysia and RM2.80 in East Malaysia. The pricing adjustment helped lift Eco-Shop's gross profit margin to 31.9%, up from 27.2% in 4QFY2024, aided further by a favourable product mix and currency gains in procurement. The company declared a 1 sen interim single-tier dividend, amounting to RM57.5 million, payable on Aug 26. For the full financial year ended May 31, 2025 (FY25), Eco-Shop reported a 17% increase in adjusted net profit to RM213.7 million, while revenue rose 16% to RM2.8 billion. The group opened 74 new outlets during the year, bringing its total store count to 371. The company noted a marginal 0.4% decline in same-store sales growth (SSSG) for FY2025, attributed to initial consumer pushback following the April price increase. Nonetheless, its CEO Jessica Ng said the group remains upbeat about its long-term prospects. 'Our confidence is underpinned by the continued expansion of our store network and rising consumer demand for value-driven retail. 'Despite the setback in SSSG, we anticipate margins and performance to remain healthy or continue improving,' she said. — TMR
Barnama
a day ago
- Barnama
Value Store Operator Eco-Shop Posts Higher Earnings, Revenue In FY2025
BUSINESS KUALA LUMPUR, July 28 (Bernama) -- Eco-Shop Marketing Bhd recorded a net profit of RM204.32 million for its financial year ended May 31, 2025 (FY2025), from RM177.28 million a year earlier. The Johor-based dollar-store chain stated that the improved net profit was achieved despite higher operating costs arising from its expanded store network and the implementation of minimum wage policies. Revenue for the year also strengthened to RM2.79 billion against RM2.40 billion, underpinned by the net addition of 74 new stores during the financial year. 'Same-store sales growth (SSSG) recorded a marginal decline of 0.4 per cent, reflecting normalisation in consumer spending at mature outlets, partly attributed to product availability challenges,' the group said in a Bursa Malaysia filing today. The number of sales transactions increased 21.6 per cent to 114.8 million in FY2025. For the fourth quarter, the retailer recorded a net profit of RM49.41 million against RM63.27 million year-on-year. Revenue for the quarter, however, rose to RM688.98 million against RM640.67 million a year earlier, primarily driven by the continued expansion of the group's store network, with the net addition of 22 new stores in the quarter versus 19 in the fourth quarter of 2024. The total store count increased to 371 stores in the fourth quarter of 2025 from 297 in the fourth quarter of 2024. Meanwhile, the company declared an interim single-tier dividend of 1.0 sen per ordinary share or approximately RM57.5 million in respect of FY2025, to be paid on Aug 26, 2025. The entitlement date for the dividend falls on Aug 12, 2025. According to the filing, the number of sales transactions increased 12.4 per cent to 28.9 million in the fourth quarter of FY2025.
