Treet Corporation Limited: performance and outlook

Treet Corporation Limited (PSX: TREET) is the flagship company of the Treet Group, with its core business centred on blades, razors, and grooming products. FY26 was an important year for the company as it strengthened its domestic franchise, improved margins and continued to broaden its portfolio beyond traditional blades into higher-value grooming products. The launch of Genesis and Estela was a major step in this strategy, while management also worked on improving the profitability of its export business through better pricing and greater focus on selected international markets. TREET Performance in FY26 TREET delivered a strong standalone performance in FY26, with improvement across revenue, volumes, gross margins, and operating profitability. Net revenue increased by 10. 1 percent year-on-year to Rs13. 86 billion, driven largely by the domestic market. Domestic revenue rose by around 19 percent, supported by higher volumes, a favourable sales mix and stronger commercial execution. Sales volumes increased by 5. 5 percent to 1, 543 million blades, from 1, 462 million blades in FY25. Domestic volumes reached 1, 213 million blades, showing that topline growth was supported by underlying demand as well as a better sales mix. Exports remained softer during the year, partly because TREET deliberately adjusted pricing to improve historically weak export margins. Geopolitical developments in the Middle East and shipping disruptions also affected export activity. While this weighed on export volumes, the move towards more disciplined pricing should support a more sustainable and profitable export business over time. The strongest feature of FY26 was the improvement in profitability. Gross profit increased by 20. 5 percent year-on-year, substantially ahead of revenue growth, while gross margin improved to around 40 percent from 36. 5 percent. The margin expansion reflected higher volumes, a more favourable product mix, disciplined cost management, and improved export pricing. Cost of revenue increased much more slowly than sales, allowing a larger share of revenue growth to flow through to gross profit. Operating performance was also strong. Operating profit increased by around 25 percent year-on-year, while operating margin improved to 11. 9 percent from 10. 5 percent. This improvement came despite higher administrative and distribution expenses and continued investment in advertising and brand development. The fact that operating margins still expanded despite these investments highlights the strength of the improvement in gross profitability. TREET’s core blades and grooming business also became a larger contributor to overall Group performance in FY26. The standalone business accounted for around 53 percent of Group sales, up from 47 percent in FY25, while its share of Group operating profit increased more sharply to around 64 percent from 48 percent. This highlights the growing importance of the core TREET business to the Group, with stronger domestic sales and margin expansion allowing it to contribute a much larger share of operating earnings than in the previous year. The launch of Genesis and Estela also broadened TREET’s growth platform. The company is gradually moving beyond traditional blades into higher-value grooming categories and modern-trade channels. This provides an opportunity to improve product mix, strengthen brand positioning and participate in a wider personal-care market. Below the operating line, lower financing costs provided another significant boost. Finance cost declined by around 36 percent year-on-year, helped by lower short-term borrowing utilisation, lower interest rates, and the use of proceeds from the partial divestment of Treet Battery Limited shares for debt reduction. Other income declined during the year, although it continued to benefit from dividend income and a capital gain on the partial divestment of Treet Battery Limited. Profit before tax increased by around 23 percent year-on-year, reflecting the strong improvement in operating profitability and lower finance costs. Profit after tax, however, increased by only 2 percent, as the tax expense nearly doubled during the year. As a result, net margin slipped to 7. 7 percent from 8. 3 percent. The limited growth in the bottomline therefore understates the improvement in TREET’s underlying business. Gross profit, operating profit, and profit before tax all recorded strong double-digit growth, while the higher tax charge restricted the increase in reported profit after tax. Outlook TREET enters FY27 from a stronger operating position, with higher domestic volumes, improved gross and operating margins, lower finance costs, and a broader grooming portfolio. The domestic market remains the key growth engine, while Genesis and Estela provide an opportunity to expand into higher-value products and strengthen the company’s presence in modern trade. Exports also offer potential upside. Management is focusing on rebuilding the export business on more sustainable margins rather than simply maximising volumes, with greater emphasis on selected international markets, new distributors, and modern-trade opportunities in the GCC. Overall, the outlook for the standalone business remains positive. Continued domestic volume growth, a richer product mix, disciplined pricing and lower financing costs should support profitability. The key challenge will be to restore export growth while scaling newer premium brands without diluting the margin gains achieved in FY26.

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