While Hong Leong Investment Bank (HLIB) expects the strategy to help boost the group’s profitability, Kenanga Research has taken a more cautious stand about its sales prospects.

Mr DIY has already opened 93 new stores this year, accounting for 52% of the 180 it plans to build in 2022.

The group’s first Mr DIY Plus store at the Mid Valley Megamall, opened recently, has received overwhelming response from customers. Another 10 Mr DIY Plus stores will be opened in the next three years, mostly in prime locations with higher foot traffic.

HLIB said Mr DIY’s across-the-board price hike in April and May should help to cushion margin contractions caused by multiple cost headwinds.

“As per management guidance, the full implementation of this price increase will be reflected fully in the coming quarter,” it said in a research note today.

Kenanga Research said although the store expansions were positive for the group, it remained cautious on the group’s sales prospects for the second half of FY22 (H2 2022) as inflationary pressures start to creep in.

“However, historically, the fourth quarter is the strongest quarter (for the group) due to the year-end shopping season and festivities. With the adjustments in prices, we expect gross profit margin to remain stable at circa 41% for the rest of the year,” it said in a separate note.

Conversely, Maybank Investment Bank believes Mr DIY’s recent price hike in the second quarter could further dampen sales volume growth in H2 2022, given the absence of festive-driven sales momentum.

“Although Mr DIY remains a sector beneficiary for consumer down-trading, we understand that average monthly sales have softened post-Hari Raya in April-May 2022.

“As more than 70% of its products are sourced from foreign end suppliers, particularly China, any major changes in currency, tax, trade policies or tariffs in China may adversely impact earnings, and higher operating expenses through minimum wage hikes could also impact earnings growth negatively,” it added.