DFI Retail Group’s 2025 results: profit up 35% and big cash back to investors
DFI Retail Group has posted a strong set of 2025 prelims. Underlying profit jumped 35% to US$270.3 million, right at the top end of guidance, while reported profit swung to US$234.7 million from a loss last year. The Board also confirmed a final dividend of US¢10.50 per share, under a new 70% payout policy, after returning approximately US$740 million to shareholders in 2025, including a US$600 million special.
For context, “underlying profit” strips out one-off and non-trading items to show ongoing performance. “Like-for-like” (LFL) growth compares sales of stores that were open both this year and last.
Key numbers investors should know
| Metric (year to 31 Dec 2025) | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | US$8,868.9 million | US$8,868.9 million | Flat |
| Underlying profit attributable to shareholders | US$270.3 million | US$200.6 million | +35% |
| Reported profit/(loss) attributable to shareholders | US$234.7 million | (US$244.5 million) | n/a |
| Underlying EPS | US¢20.05 | US¢14.91 | +35% |
| Final dividend per share | US¢10.50 | US¢7.00 | +50% |
| Special dividend per share | US¢44.30 | – | n/a |
| Free cash flow | US$281 million | US$158 million | +78% |
| Net cash/(debt) at year end | US$70 million net cash | US$468 million net debt | Improved |
| Return on capital employed (ROCE) | 9.4% | Not disclosed | – |
What drove the improvement in 2025
Health & Beauty: Mannings and Guardian lead from the front
Sales rose 7% to US$2.6 billion, with LFL up 5%. Underlying operating profit increased 8% to US$228 million. The push into wellness is working, helped by in-store health, skin and scalp assessments and an Own Brand reset that lifted gross profit per SKU by 35% in Hong Kong and Macau. Guardian delivered 5% LFL growth across Southeast Asia, with Indonesia and Vietnam up more than 10% and regional operating profit up 16%.
Convenience: cigarette drag, but ready-to-eat momentum
Total sales fell 2% to US$2.3 billion, or 3% on a LFL basis, mainly due to lower-margin cigarette declines after Hong Kong’s 2024 tax increase. Underlying operating profit slipped 6% to US$97 million. The good news is mix is improving and profit growth returned in H2 as 7-Eleven pushed higher-margin non-cigarette categories. Ready-to-eat (RTE) now accounts for 24% of Convenience sales, and in Hong Kong RTE rose to 18% of sales from 16% in 2024. South China added a net 99 stores and plans to expand Food Bars to 1,250 locations by 2028, up from 325.
Food: value focus lifts volume and margins
Food sales were US$3.0 billion, stable on an LFL basis. Underlying operating profit rose 6% to US$62 million, helped by a recovery in Singapore earlier in the year and stronger execution in Hong Kong. Wellcome’s Everyday Low Price strategy and direct sourcing delivered a 2% volume uplift and a 30-basis point gross margin improvement, even as LFL sales dipped 1% amid intense cross-border competition. Hong Kong online Food sales grew more than 20% after adding quick-commerce and click-and-collect.
DFI completed the divestment of its Singapore Food business in December 2025, keeping Guardian and 7-Eleven in the market.
Home Furnishings: sales softer, profit better
IKEA sales declined 3% to US$677 million, with LFL down 5%, reflecting weak big-ticket demand. Operating profit nevertheless improved to US$26 million from US$16 million thanks to cost control and targeted price reinvestment. IKEA Food remains a useful traffic driver at 14% of sales. The online penetration target is 18-20% by 2028.
Restaurants: steady contribution from Maxim’s
DFI’s share of Maxim’s underlying profits rose 9% to US$72 million on resilient sales of US$3.1 billion and cost optimisation. Mooncake sales were better and Southeast Asia restaurants improved, offsetting tougher conditions in Hong Kong and the Chinese mainland.
Portfolio simplification, net cash and cash returns
Management continued its pivot from a portfolio to a focused operating company. In 2025 DFI sold its minority stakes in Yonghui and Robinsons Retail and divested Singapore Food, generating about US$1 billion of cash proceeds. While the disposals produced non-cash accounting losses mainly from historical currency translation, they strengthened the balance sheet, which moved to US$70 million net cash at year end after paying the US$600 million special dividend in October.
The company says total shareholder return exceeded 90% in 2025, combining dividends with a share price rise of more than 70% across the year.
Dividend policy and timetable
DFI adopted a 70% payout ratio in December 2025. The Board recommends a final dividend of US¢10.50 per share, payable on 13 May 2026 to shareholders on the register at close of business on 20 March 2026. The shares go ex-dividend on 19 March 2026. Currency options vary by register and are detailed in the RNS.
Digital and data: building an omnichannel edge
Online sales penetration increased by 140 basis points to 6.4% as order volumes more than doubled. DFIQ Media, the retail media arm, quadrupled revenue from a low base, using over 7 million monthly active users and more than 10,000 in-store digital screens to sell media to brands. The new DFIQ Portal launched in December 2025, giving suppliers real-time analytics to sharpen planning and inventory.
Outlook and guidance for 2026
The Group guides to organic revenue growth of about 2-3% in 2026 and underlying profit attributable to shareholders of US$270-300 million. Adjusting for the divestments of Singapore Food and Robinsons Retail, that equates to 13-25% year-on-year growth. Medium term, DFI is targeting underlying profit of US$310-350 million and a ROCE of at least 15% by 2028, plus a 7-10% online sales mix.
My take: what’s good, and what to watch
Reasons to be positive
- Execution is improving. Underlying profit up 35% with better free cash flow and a shift to net cash is exactly what shareholders wanted.
- Health & Beauty is a genuine growth engine, with clear differentiation in wellness and Own Brand margin gains.
- Convenience mix is moving the right way. RTE penetration at 24% and Food Bar expansion in South China should support margins.
- Disciplined capital allocation. Exiting sub-scale or lower-return assets funded debt paydown and a hefty US$600 million special dividend.
- Higher payout policy. A 70% dividend payout gives investors greater visibility on cash returns.
Risks and watch-outs
- Cigarette declines will continue to be a headwind in Hong Kong, so the pace of mix shift into non-cigarette and RTE is key.
- Food faces fierce competition, including cross-border price pressure and e-commerce platforms. Value reinvestment must keep driving volume and margin protection.
- IKEA sales are still soft. Profitability improved through costs, but top-line recovery would help de-risk the target range.
- Guidance implies flattish to modest profit growth headline, given the smaller portfolio post-divestments. Delivery against the 2028 ROCE and profit targets will matter.
What to track in 2026
- Health & Beauty wellness penetration and the rollout of in-store assessments to 25% of stores.
- 7-Eleven RTE share in Hong Kong and Food Bar rollout in South China on the path to 1,250 locations by 2028.
- Wellcome’s price gap vs the Greater Bay Area and whether the 2% volume growth can be sustained or improved.
- Digital monetisation: online mix trending toward 7-10% by 2028 and further growth in DFIQ Media revenues.
- Cash generation and capital discipline as the Group targets accretive inorganic opportunities using a net cash balance sheet.
Bottom line
DFI has delivered what it promised in 2025: cleaner portfolio, stronger cash flow, a move to net cash and a bigger dividend, with Health & Beauty and Convenience setting the pace. The near-term job is to keep shifting mix, hold the value line in Food and scale digital and retail media. If management executes on those levers, the 2026 guidance looks achievable and the 2028 targets are within reach.
