DFI Retail Group reports underlying profit drop of 18% in Q1 2025

The group still maintains its full-year profit guidance of $297.88m to $349.68m

DFI Retail group reported a drop of 18% in its underlying profit for the first quarter of 2025, attributed to the divestment of the supermarket chain Yonghui.

Excluding divestments, the group said underlying profits increased 28% year-on-year for the quarter.

In Q1, DFI Retail's underlying subsidiary sales, excluding the impact of cigarette tax and the divestment of the Hero Supermarket business in Indonesia, were 1% below the same period in 2024 and stable on a like-for-like (LFL) basis.

Going by business, LFL sales for the Health and Beauty division in the first quarter were up 4% year-on-year, with all operating markets reporting positive LFL sales growth. Mannings Hong Kong’s performance was supported by increased basket size due to effective promotional campaigns.

Guardian continued to deliver strong LFL performance across key markets, partly due to the timing of Raya Festive sales. Indonesia, in particular, achieved double-digit growth in both LFL sales and profit. Guardian Malaysia introduced its loyalty programme in March, with 1.4 million members within the first month of launch. Improved operational efficiency contributed to a 10% growth in overall Health and Beauty profit.

Meanwhile, LFL sales for the Convenience division declined 6% year-on-year due to lower cigarette sales following a tax increase in Hong Kong beginning in late February 2024. Overall, non-cigarette LFL sales were down 2% compared to the first quarter of 2024.

The Group expects to mitigate sales impact from reduced cigarette volumes upon annualisation of the tax effect and continued growth in higher-margin ready-to-eat (RTE) businesses. LFL sales for Macau, Southern China and Singapore were slightly behind the same period of last year.

The group said it focused on expanding its product range and enhancing its omnichannel shopping experience, including the launch of a new 7-Eleven app in Singapore in February. Despite a favourable sales mix shift towards higher-margin RTE products, profit for the division declined year-on-year due to lower reported sales as a result of the cigarette tax impact.

The Food division reported LFL sales marginally below the first quarter of 2024. Despite consumers’ pivot to value, Hong Kong LFL sales remained largely stable year-on-year, benefiting from increased traffic and growing omnichannel sales. In line with the Group’s expectation, cross-border travel into the Chinese mainland showed early signs of stabilisation with moderating year-on-year growth in the first quarter of 2025.

Food profit increased by approximately 14% year-on-year, supported by improved profitability in Singapore Food.

Whilst LFL sales of Home Furnishings remained challenged due to intense competition and basket mix change, the division reported a significant recovery in underlying profit, helped by effective cost control measures across markets. Similar to the Food format, the IKEA Hong Kong business is strengthening its value-driven omnichannel proposition to compete better with Chinese mainland digital players.

In Indonesia, the IKEA team remains focused on driving sales through expanded digital channels and a more effective marketing strategy. The group believes that IKEA remains well-positioned to capitalise on a recovery in demand for home furnishings when market conditions improve, given its strong brand equity and commitment to consumer protection and product safety.

Daily e-commerce order volume reached 86,500, representing an increase of over 70% year-on-year, with improving profit contributions.

Retail Media continues to build momentum, with over 60 targeted advertising campaigns completed during the quarter, compared to 101 for the full year of 2024.

Meanwhile, Maxim’s, the group’s 50%-owned associate, reported a substantial recovery in profit contribution due to cost optimisation. Sales were stable year-on-year with strong growth in Southeast Asia offset by weaker restaurant performance on the Chinese mainland and store closures in Hong Kong.

Robinsons Retail reported 3% LFL sales growth driven by the Food, Drugstore and Department Store segments. The reported profit dropped 85% year-on-year due to a one-time gain from the Bank of the Philippine Island and Robinsons Bank merger booked early last year. 
The group said it maintains its full-year guidance of underlying profit attributable to shareholders between $297.88m (US$230m) and $349.68m (US$270m), supported by an organic revenue growth of approximately 2%.