Retail

4Q25 Preview: Expansion-Led Growth, SSSG Gradually Recovering

 

  • We estimate 4Q25/FY25 sector revenue growth of +6.5/+6.5% yoy, relatively in line with our and consensus estimates.
  • Given the manageable opex, we expect sector op profit to increase by +6.6% yoy in 4Q25 with estimated core profit growth of +4.1% yoy.
  • Maintain Overweight on the sector; top picks are MIDI (Buy, TP Rp550) and MAPA (Buy, TP Rp800).

 

4Q25: store expansion drives growth amid modest recovery in SSSG

We estimate aggregate Retail sector to deliver 4Q25 rev growth of +6.5% yoy and +8.6% qoq, supported by growth across retailers. MAPA is expected to lead with +22.6% yoy, followed by MIDI (+7.3% yoy), MAPI (+7% yoy), and ACES (+3.1% yoy). This translates to the sector’s FY25 cumulative rev growth of +6.5% yoy, broadly in line with consensus’ estimates of +7.5% yoy. Nonetheless, we continue to see the majority of the growth still comes from new store expansion, as SSSG remains relatively weak despite modest improvements in 3Q25 for selected retailers. MIDI’s SSSG improved further to -0.39% in 4Q25, bringing FY25 SSSG to +1.48%. In contrast, ACES has yet to see a recovery in SSSG, recording -8.3% in Dec25 despite the year-end seasonality. On margins, we expect gross margins to soften in 4Q25 and FY25, reflecting weakening IDR and normalization from last year’s high base.

 

MIDI and MAPA lead earnings growth, while ACES lags

Nonetheless, given the manageable opex, we expect sector operating profit to increase by +6.6% yoy in 4Q25 (FY25 +2.6% yoy) with core profit growth of +4.1% yoy (FY25 +3.7% yoy).

  • MIDI – Despite SSSG remaining slightly negative at -0.39% in 4Q25, management indicated further improvement in Jan26, with SSSG reaching mid-single digit. We estimate FY25 revenue and core earnings growth of +4.9% and +34% yoy, respectively.
  • MAPA – The company highlighted positive momentum in 4Q25, supported by year-end seasonality, particularly from key footwear brands such as New Balance, Hoka, Skechers, Foot Locker, and remains confident in achieving its FY25 guidance. We estimate FY25 rev and core profit growth of +15.2% and +11.8% yoy, respectively.
  • MAPI – Following stronger historical seasonality in 4Q, we expect MAPI to deliver FY25 revenue and core profit growth of +8.3% and +6.3%, respectively. Besides seasonality, growth is also supported by the launch of iPhone17 in 4Q25 and continued turnaround in MAPB.
  • ACES – We expect more conservative FY25 rev growth of +2.1% yoy, reflecting the still weak indicative sales and SSSG in Dec25. Furthermore, given the higher A&P spending throughout the year for AZKO rebranding, we project its operating profit and core profit to decline by 15.2% and 20% yoy, respectively, in FY25.

 

Maintain Overweight, top picks MIDI and MAPA

We prefer MIDI (Buy, TP Rp550) for its defensive business profile as a staple retailer, with projected solid +16.8% earnings growth in FY26F. Its current valuation at 13.2x PE FY26F also looks attractive, in our view. We also like MAPA (Buy, TP Rp800) driven by the strong growth potential and its role as growth driver for MAPI. We think its lower base from last year should give a stronger foundation for this year’s performance.

 

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