Half Year 2026 DFI Retail Group Holdings Ltd Earnings Call Transcript
Key Points
- Underlying profit increased 44% in the first half of 2026, driven by strong earnings recovery in IKEA and Food, lower SG&A costs, and reduced financing costs.
- Like-for-like sales improved consistently to 3% growth, with Health & Beauty gaining market share across all key markets and Convenience returning to growth after 10 consecutive quarters of decline in Hong Kong.
- The digital ecosystem, including retail media and e-commerce, is now margin accretive to stores, contributing 35% of revenue growth with a 300% increase in DFIQ Media.
- IKEA achieved a sharp turnaround with 4% like-for-like sales growth (vs. -6% a year ago) and operating profit up 85%, driven by price investments and cost optimization.
- The company raised its full-year guidance for sales (to 3%-4% organic growth) and underlying profit (to $285-$305 million), reflecting strong momentum and confidence in delivering top-end results.
- Interim dividend increased 77% to $0.062 per share, with a strong balance sheet and cash generation supporting flexibility for inorganic opportunities.
- Health & Beauty operating margin declined 40 basis points due to intensified competition in Malaysia and growth of third-party marketplaces like TikTok and Shopee.
- Food business in Hong Kong remains challenged by cross-border shopping to Shenzhen, though the price gap has narrowed to a 3% discount, requiring ongoing price investments.
- Cigarette sales, while stabilized, still represent a significant portion of Convenience revenue, and the pivot to higher-margin categories like ready-to-eat is still in progress.
- The Cody Hong Kong acquisition is expected to be mildly dilutive in year one, with profitability not expected until 12-18 months out.
- SG&A savings, while strong (down 15% like-for-like), may be partially reinvested in AI and pricing, limiting near-term margin expansion.
- Malaysia's promotional environment and government vouchers (MySARA) that exclude health & beauty stores have temporarily shifted volumes, pressuring margins.
Good morning, everyone, and thank you for attending the DFI Retail Group 2026 half year results presentation. I'm Karen Chan, Strategy and Investor Relations Director. Joining us today is Mr. Scott Price, Group Chief Executive Officer; and Mr. Tom Van der Lee, Group Chief Financial Officer, who will be providing prepared remarks on our half year results, followed by a Q&A session.
Today's presentation is being webcast in its entirety. In addition, the full text of results and presentation slides are already uploaded on to the IR website.
Before we start, I would like to remind you of the following forward-looking statements. The information about to be presented is for information purposes only and is not intended to be investment advice for any person. There's no intention to invite for any dealings in any securities. There may be forward-looking statements mentioned in the presentation materials, which include statements regarding our intent, belief, or current expectations with respect to the company's business
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