DFI Retail's Margin Expansion Could Persist into 2H Despite Headwinds

Dow Jones09:39

0139 GMT - DFI Retail Group's margin expansion is likely to persist into 2H despite headwinds from challenges such as rising costs, say Citi analysts in a note. Technology-enabled store efficiency, a favorable shift towards higher-margin products and ongoing cost rationalization are likely to support the company's margins, they say. They reckon DFI Retail's commitment to return excess capital to shareholders if it can't find suitable merger-and-acquisition opportunities suggests a highly-disciplined capital-allocation framework. The company also seems confident of reaching its upgraded full-year guidance of 3%-4% organic sales growth and core net profit of US$285 million-US$305 million, the analysts say. Citi retains its buy rating and US$4.80 target price. The Singapore-listed shares rise 2.2% to US$3.66.

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