KUALA LUMPUR (Aug 26): Fashion retailer Padini Holdings Bhd slipped into the red in the fourth quarter ended June 30, 2020 (4QFY20), posting a net loss of RM16.84 million versus a net profit of RM16.62 million in the preceding quarter ended March 31.

This is the first time Padini registered a loss-making quarter since 2004, when it reported a net loss of RM2.3 million in 4QFY04.

Quarterly revenue halved to RM174.2 million from RM347.32 million in 3QFY20.

On a year-on-year basis, Padini registered a steeper fall from a net profit of RM54.43 million in 4QFY19, while revenue was also down 66.27% from RM516.47 million.

Padini attributed the lower earnings to mainly the drop in sales resulting from the enforcement of MCO until May 4, 2020, stock provision and the impact of implementation of MFRS 16 Leases, while the lower revenue was due to the adverse impact from COVID-19 outbreak resulting in the MCO enforcement that has impacted consumer demand and restricted business operations at full capacity since March 18, 2020.

On prospects, the fashion retailer commented that the retail business in general is impacted by the outbreak of COVID-19 to varying degrees, both in terms of sales as well as profitability.

“Management will continue to implement measures to control costs, optimize working capital, preserve cash and streamline its operations to minimize the impact,” said Padini, adding that the next financial year remains challenging and the outlook is still unpredictable as the full impact of the COVID-19 pandemic cannot be ascertained until the health crisis is fully brought under control.

Padini’s shares closed one sen lower at RM2.15 today, valuing the company at RM1.42 billion. Over the past year, the counter has fallen 36.4% from RM3.38.

Edited by Kathy Fong