KUALA LUMPUR (May 19): Padini Holdings Bhd’s net profit jumped 26% to RM26.59 million or 4.04 sen per share for its third financial quarter ended March 31, 2015 (3QFY15) from RM21.11 million or 3.21 sen per share a year ago.

The improved earnings were in tandem with a 30% increase in revenue to RM283.62 million from RM218.85 million in 3QFY14.

Padini declared a fourth interim dividend of 2.5 sen for the year ending June 30, 2015 (FY15), payable on June 22, 2015.

In a filing with Bursa Malaysia today, Padini (fundamental: 2.5; valuation: 1.5) attributed the better revenue for 3QFY15 to the longer Chinese New Year shopping season, while an additional seven Brand Outlet Stores and six Padini Concept Stores had also supported its growth.

Padini said its gross margins for 3QFY15, however, fell 1.8% year-on-year.

“In spite of costs pressures, and also to remain relevant to the markets we serve, we have continued with prices that stressed on affordability and value,” it said.

For the nine months period (9MFY15), net profit fell 20% to RM62.05 million from RM77.25 million a year ago, while revenue rose 13% to RM755.96 million from RM670.25 million in 9MFY14.

Padini said “driving market share and revenues must necessarily take precedence over margins”, given the challenging circumstances the group is operating under.

“For our final financial quarter, it may be expected for conditions to be even more difficult and profitability harder to achieve as the market and we ourselves grapple with the real and perceived impact of the goods and services tax on sales and costs,” it added.

Padini shares closed 3 sen or 2.17% lower at RM1.35 today, bringing its market capitalisation to RM907.92 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)