Oriental Kopi's FMCG gross margin strongest in four quarters – HLIB Research

Oriental Kopi Holdings Bhd reported a strong gross margin for its fast-moving consumer goods (FMCG) segment in Q3 FY26, with a 44.7 percent margin, the highest in four quarters. This 8.6 percentage point increase over the previous quarter, and well above the 42 percent average of the previous two quarters, indicates a strong performance for the FMCG business.

With a 44.7 percent gross margin compared to 21.5 percent for café chains, HLIB Research anticipates the FMCG segment's growth to be margin-accretive at the group level. The strong performance was primarily driven by the external business, with revenue rising 66.1 percent year-on-year. HLIB Research attributes this growth to successful collaborations with FamilyMart and Inside Scoop, as well as distribution opportunities through the Indonesian joint venture and a planned canned ready-to-drink coffee product.

However, the same-store sales growth (SSSG) for Oriental Kopi has been slower in Q9FY26, mainly due to disruptions at top-performing outlets such as City Square Johor Baru, Kuala Lumpur International Airport, Pavilion KL, and KLCC. These outlets faced a decline in tourist arrivals due to the Iran War, causing a 0.5 percent growth across 15 outlets, compared to a 12.6 percent growth in the same period last year.

HLIB Research does not expect a clear SSGG recovery in the near term, suggesting that Q1 FY27 will provide a clearer indication of the mature base.