Bata returns to profit growth in Q1

FE REPORT
After a significant drop in annual profit, Bata Shoe Company (Bangladesh) reported a marginal increase in first-quarter profit for 2026, supported by stronger Eid-season demand, although rising costs continued to weigh on margins.
The multinational footwear manufacturer posted a net profit of Tk 371 million for January-March this year, up slightly from Tk 368 million in the same period last year. Earnings per share (EPS) edged up to Tk 27.14 from Tk 26.92, reflecting modest bottom-line growth.
Revenue rose 6 per cent year-on-year to Tk 3.80 billion, driven primarily by Eid festive sales, supported by new product assortments and improved customer response to updated designs, said the company in its earnings note.
However, profitability remained under pressure as costs increased across major heads. Cost of sales rose 5.6 per cent to Tk 2.06 billion, while operating expenses climbed 8.5 per cent to Tk 1.14 billion, driven by higher brand promotional spending and inflation-led increases in utilities and overheads.
Despite the pressure on earnings, the company recorded a sharp improvement in cash generation. Net operating cash flow per share rose significantly to Tk 67.59, compared to Tk 48.06 a year earlier, reflecting stronger turnover and more efficient working capital management.
The company explained that cash flow increased mainly due to higher turnover and optimised cash outflows towards suppliers and contractors.
Meanwhile, the stock of Bata declined 0.75 per cent to Tk 845.3 per share on Thursday on the Dhaka Stock Exchange (DSE).
Annual Performance
The quarterly performance contrasts sharply with the company's annual results for 2025, when profit plunged 96 per cent year-on-year to Tk 12 million amid operational disruptions and weak demand conditions.
The sharp earnings decline underscores a difficult year, with the company slipping into losses in the second, third, and fourth quarters of 2025.
However, a strong first quarter-when the company earned Tk 368 million-helped it narrowly stay in the green for the full year, ending with a modest net profit.
Despite the earnings slump, the board of the company declared a 105 per cent final cash dividend, in addition to a 143 per cent interim dividend already paid earlier in the year, bringing the total payout to 248 per cent for 2025. This is lower than the 445 per cent cash dividend distributed in 2024.
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