Sheng Siong (SGX:OV8) reported solid 1Q26 results with revenue of S$453mil (+12% y-o-y) and earnings at S$43mil (+12% y-o-y). Top‑line growth was largely driven by new store openings, contributing ~+9% from 12 new stores, while same‑store sales recorded a healthy +3.5% increase. This was slightly offset by a ‑0.4% decline in China sales.
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Gross margin expanded to 31.0% while net margin remained broadly stable at 9.5%
Gross margin expanded from 30.3% in 1Q25 to 31.0% in 1Q26, supported by improved mix and economies of scale. Management highlighted a slight increase in higher‑margin fresh mix, while house brand contribution remained broadly stable. Margins in non‑fresh categories also improved, benefiting from bulk purchase discounts.
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The higher government grants were largely attributable to one‑off receipt of co‑funding subsidies for Progressive Wage Model (PWM) implementation, suggesting that other income is likely to taper in subsequent quarters and years. Meanwhile, staff costs rose 16% y-o-y, outpacing revenue growth due to PWM implementation and higher variable bonuses.
Store opening pipeline
Secured 4 new stores for the year with 4 awaiting tender results.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
