EPS of $0.27 decreased by 73.8% from previous year
Gross margin of 68.2%
Net income of 5.53M
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Bedding World Co Ltd (2938.TWO) QQ1 2025 Results – Resilient Gross Margin Amid Revenue Contraction in Taiwan Furnishings Sector
Executive Summary
Bedding World Co Ltd posted QQ1 2025 results underscoring a meaningful top-line contraction against a backdrop of strong gross margins. Revenue declined to 176,868,500 TWD, down 14.7% year over year and 16.3% quarter over quarter, while gross profit was 120,711,000 TWD for a gross margin of 68.25%. Despite the revenue softness, the company generated EBITDA of 20,196,000 TWD and reported operating income of 10,331,000 TWD (5.84% operating margin), culminating in net income of 5,525,000 TWD (3.12% net margin) and basic EPS of 0.27. The QoQ and YoY declines were broad-based across revenue and profitability metrics, indicating a softer demand environment rather than a margin problem, given the relatively stable gross margin. SG&A expenses remained elevated at 110,173,500 TWD (roughly 62% of revenue), with selling and marketing expenditures totaling 87,574,500 TWD, highlighting continued brand and channel investments even as top-line growth decelerates.
Financial highlights (Q1 2025, TWD):
- Revenue: 176,868,500; YoY: -14.71%; QoQ: -16.25%.
- Gross Profit: 120,711,000; Gross Margin: 68.25%; YoY Gross Profit: -15.09%; QoQ: -17.23%.
- Operating Income: 10,331,000; Operating Margin: 5.84%; YoY: -64.09%; QoQ: -65.28%.
- EBITDA: 20,196,000; EBITDA Margin: 11.42%.
- Total Other Income/Expenses Net: -2,826,500.
- Income Before Tax: 7,504,500; Tax Expense: 1,979,500; Net Income: 5,525,000; Net Margin: 3.12%.
- EPS (basic/diluted): 0.27; Weighted average shares outstanding: 20,140,050.
Key ratios: EBITDARatio 11.42%; Income Before Tax Margin 4.24%; Net Income Margin 3.12%.
Note: YoY/QoQ comparisons and margins align with disclosed quarterly data; no debt or cash balance figures are provided in the dataset.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
176.87M
-14.71%
-16.25%
Gross Profit
120.71M
-15.09%
-17.23%
Operating Income
10.33M
-64.09%
-65.28%
Net Income
5.53M
-73.40%
-74.40%
EPS
0.27
-73.79%
-74.77%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings call transcript not provided in the supplied materials; therefore, no management quotes or theme-based highlights could be extracted. The analysis relies on the disclosed P&L metrics and the four-quarter trend. If a transcript is supplied, interpretation can be added under themes such as strategy, operations, and market conditions with direct quotes and context.
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Forward Guidance
No explicit forward guidance was published in the provided data. Given QQ1 2025 results, applicants should monitor for any management indications of demand stabilization in Taiwan’s consumer furnishings market, potential price/mix adjustments, and SG&A leverage as volumes recover. Key factors to watch include: (1) demand normalization in the home/furnishings segment, (2) progression of omni-channel initiatives (retail, counters, e-commerce), (3) incremental margins from cost control and product mix, and (4) any changes in promotional activity or channel mix that could impact gross margins or operating leverage.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
2938.TWO Focus
68.25%
N/A
N/A
N/A
603458.SS
19.20%
-8.10%
-0.66%
-25.21%
2741.TWO
0.00%
0.00%
0.00%
0.00%
1227.TW
25.40%
6.19%
1.89%
21.99%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bedding World exhibits a resilient gross margin and positive near-term profitability despite a softer top line in QQ1 2025. The key to a constructive long-term outlook is the ability to translate margin resilience into revenue growth through channel expansion (especially e-commerce), product mix optimization, and continued SG&A discipline. Investors should monitor demand stabilization in Taiwan’s furnishings market, the pace of channel diversification, and any management commentary on guidances or milestones. Given the lack of balance-sheet detail, valuation and liquidity considerations remain an important due diligence item before committing capital.
Key Investment Factors
Growth Potential
Healthy gross margin of 68.25% signals pricing power and product mix strength in a stable Taiwanese bedding market. Opportunity exists in expanding e-commerce and omnichannel presence to offset brick-and-mortar headwinds, and in optimizing SG&A leverage as the fixed-cost base grows with revenue.
Profitability Risk
Revenue degradation in QQ1 2025 (YoY and QoQ declines) underscores demand sensitivity in the consumer furnishings sector. High SG&A intensity (~62% of revenue) could compress margins if top-line growth remains weak. Competitive dynamics and macroeconomic sensitivities in Taiwan pose additional downside risks to volumes.
Financial Position
Net income was positive at 5.525m with a 3.12% net margin; EBITDA covered interest expectations given no interest expense reported. However, balance sheet specifics (debt, cash, liquidity) are not provided, limiting a complete assessment of financial flexibility.
SWOT Analysis
Strengths
Gross margin of approximately 68.25% in QQ1 2025, indicating strong product pricing and mix.
Positive net income and EPS in a soft topline environment (Net margin ~3.12%, EPS 0.27).
Established World of Beds brand presence with diversified distribution (retail, counters, dealers, and e-commerce).
EBITDA positive with margin around 11.4%, reflecting operational cash generation potential.
Weaknesses
Revenue declined YoY (-14.71%) and QoQ (-16.25%), signaling demand softness or market seasonality.
High SG&A intensity (~62% of revenue) suggests limited near-term operating leverage if revenue does not rebound.
Limited visibility on balance sheet (no debt or cash balance data provided), constraining a full solvency/capital-allocation assessment.
Opportunities
Expansion of e-commerce and omnichannel strategy to drive top-line growth and broaden reach.
Product mix optimization and potential new product lines to sustain gross margins while growing revenue.
Channel optimization through department store counters and dealers to improve incremental sales.
Threats
Demand volatility in the consumer furnishings sector, influenced by macroeconomic conditions in Taiwan.
Competitive pressures from local and regional players, including online marketplaces.
Seasonality and promotional cycles that can cause quarterly volatility in revenue and margins.
Bedding World Co Ltd (2938.TWO) QQ2 2025 Results – Revenue Accelerates with Sticky Gross Margin; Profitability Mixed Amid Elevated Working Capital a...