DFI Retail Group Q1 underlying profit from continuing businesses up 49%

[SINGAPORE] DFI Retail Group’s underlying profit from continuing operations rose 49 per cent year on year in Q1 2026, supported by lower financing costs.

The underlying profit excludes the impacts of the divestment of the Singapore food business, the minority stake in Robinsons Retail and the closure of Mannings China, said the company in a business update on Tuesday (Apr 21).

Operating profit from continuing businesses – excluding impact from the sale of the Singapore food business and closure of Mannings China – grew 12 per cent on year due to disciplined cost control.

Despite the ongoing geopolitical uncertainties, DFI Retail Group said, its focus on daily essential spending helps it adapt to changing market conditions. “Ongoing sourcing improvement and cost optimisation initiatives support price competitiveness and limit the impact of oil price volatility on overall profitability,” it added.

The group expects FY2026 underlying profit to be between US$270 million and US$300 million, supported by organic revenue growth of around 2 to 3 per cent and a dividend payout policy of 70 per cent.

Underlying subsidiary sales – excluding cigarettes – rose 4 per cent year on year on a constant currency basis, and 3 per cent on a like-for-like basis.

This was driven by strong performances in the healthy and beauty, and home furnishings segments, as well as a return to growth in the convenience segment.

In Hong Kong, total retail sales continue to grow amid higher tourist arrivals despite ongoing northbound travel, said DFI Retail Group.

The group is restructuring costs to improve long-term efficiency, including shifting resources to format-level operations to improve “agility and responsiveness to market dynamics”.

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It targets to reduce group central selling, general and administrative expenses as a percentage of sales to 1.1 per cent by 2028, through overhead optimisation, and selective offshoring and outsourcing.

DFI Retail Group recorded US$56 million in net cash as at Mar 31, 2026. It said that it remains on track to achieve its mid-term return of capital employed target of above 15 per cent.

The group’s health and beauty division grew 7 per cent in sales on a like-for-like basis, underpinned by higher transactions and larger basket size.

All key markets recorded higher sales in their wellness categories. In South-east Asia, Guardian’s like-for-like sales growth accelerated to 9 per cent, driven by strong performance in the category and a growing online presence.

The group’s convenience division – excluding cigarettes – grew 2 per cent on like-for-like basis, underpinned by continued growth in higher-margin categories such as ready-to-eat and limited edition collectibles.

The food division reported improving performance, with Hong Kong sales up 1 per cent on a constant currency basis, compared to a 1 per cent decline in the year-ago period. Divisional profit increased by over 30 per cent in the first quarter, excluding cost reallocation and the sale of the Singapore food business.

Home furnishings like-for-like sales grew 4 per cent, rebounding after 10 straight quarters of decline. Sales recovery and cost control measures helped drive nearly 50 per cent profit growth, excluding cost re-allocation impact, said the group.

“The group remains confident in its ability to navigate an evolving market landscape, supported by enhanced financial resilience through improved product sourcing, diversified procurement, and ongoing cost optimisation,” noted DFI Retail Group.

Shares of DFI Retail Group ended on Tuesday 1.5 per cent or US$0.06 higher at US$4.16, before the announcement.