Slower pace of sales for InNature
KUCHING: InNature Bhd (Innature) saw improvements in its store sales performances across its countries of operations, but the pace of recovery has been slower than expected given subdued tourism contribution.
However, InNature is still committed to achieve its store opening targets in FY22.
“InNature’s sales have seen an uptick in Malaysia, Vietnam and Cambodia stores on a monthly basis since the first quarter of FY22,” said researchers with Maybank Investment Bank Bhd (Maybank IB Research) in a note yesterday.
“At present, domestic sales have recovered to circa 83 per cent of its pre-pandemic levels in 2019, while its Vietnam stores have experienced a faster pace of recovery with about eight per cent higher sales against 2019 figures.”
Although international tourism has resumed for Malaysia, the firm saw that large tourist groups from China and the Middle East have not returned yet, which is the main impediment to domestic sales recovery.
“Note that sales from high tourist traffic areas previously accounted for circa 15 per cent of revenue, including five per cent from airport stores.
In FY22, the group plans to open four new The Body Shop stores in Malaysia, six stores in Vietnam and one store in Cambodia. InNature has 118 stores under its belt as at June 30, 2022.
The sales performance of its new ‘Activist Makers Workshop’ concept stores (Sunway Pyramid and Mid Valley, SouthKey) have generated circa 40 per cent higher in-store sales, on average.
Hence, all new stores will be opened in this workshop format going forward.
“Our FY22, FY23 and FY24 earnings estimates are reduced by 17, 16 and 17 per cent upon adjusting for a lower same store sales growth of 42, eight and five per cent given expectations for muted recovery in tourismrelated sales at the groups’ Malaysia stores and cautious consumer spending in 2H22 amid inflation and interest rate headwinds.”