By Ying Xian Wong


Mr. D.I.Y. Group shares rose Friday after the home-improvement retailer posted stronger first-quarter earnings, with analysts expecting that positive earnings momentum to continue.

The Malaysian company's shares rose as much as 5.7% to 1.68 ringgit.

Mr. D.I.Y. said late Thursday that first-quarter net profit rose 27% from a year earlier to MYR127.8 million ($28.6 million).

Revenue rose 16% to MYR1.05 billion, supported by growth in same-store sales and an increase in the number of stores. Gross profit margin improved 5.1 percentage points to 44.3%, driven by lower freight costs and higher product prices.

Maybank Investment Bank analyst Jade Tam said the company's earnings may improve gradually, driven by higher sales and foot traffic during the recent Eid holiday.

"Gross profit margins are also expected to be sustainable throughout 2023 with continued easing in freight and logistics costs," she said in a note.

RHB Investment Bank analyst Soong Wei Siang echoed that sentiment, expecting cost tailwinds to support a higher gross profit margin and allowing Mr. D.I.Y. to be more aggressive with advertising.

"This will be effective in driving foot traffic and stimulating consumer spending against the backdrop of elevated inflation," he said in a note.


Write to Ying Xian Wong at yingxian.wong@wsj.com


(END) Dow Jones Newswires

05-11-23 2159ET