LASCO Sisters Open FY2027 with Strong Q1 Earnings

  • Sister companies, LASCO Manufacturing (LASM) and LASCO Distributors (LASD), both opened FY2027 with stronger year-on-year earnings. LASM grew net profit by 9.0% to $674.11Mn, while LASD stole the spotlight with a 45.4% surge to $441.95Mn, supported by stronger revenue growth and improved margins.
  • LASD took the lead on sales, with revenue climbing 16.1% to $8.44Bn, supported by strong demand across its food, home care & personal care, and pharmaceutical segments. Its export business also continued to gain momentum, underscoring the merits of the company’s diversification strategy. LASM also kept pace, growing revenue 7.2% to $3.13Bn buoyed by demand across its beverage portfolio.
  • Importantly, both companies converted higher sales into improved gross profitability, as revenue growth outpaced the increase in cost of sales. LASM’s gross margin expanded by 67 basis points to 39.10%, supported by a more favourable sales mix and strategic price adjustments to offset higher supplier costs. Meanwhile, LASD’s gross margin widened by 95 basis points to 18.31%, helping gross profit increase 22.4%, compared with growth of 9.1% at LASM. The margin expansion across both businesses is particularly encouraging as it suggests that growth is being accompanied by improved pricing and product-mix economics rather than volumes alone.
  • Growing the family business, however, came with higher operating costs. Operating expenses increased 15.8% at LASM, outpacing its revenue growth, as selling and administrative expenses rose amid continued marketing and promotional investment. LASD proved more efficient in this regard, with operating expenses increasing at a comparatively slower 8.3%, despite its 16.1% revenue growth.
  • Similarly, finance costs increased across both companies during the period. LASM's finance expenses rose 1,098.6% to $19.11Mn, albeit from a very low comparative base of $1.6Mn. Meanwhile, LASD's finance costs more than doubled to $16.33Mn, driven by additional debt incurred to support its warehouse expansion strategy and enhance distribution capacity.
  • Looking ahead, the LASCO sister companies remain positioned for further growth, though each is pursuing a slightly different path. LASM’s J$1.00Bn+ capacity investment should support greater factory automation production efficiency and regional export expansion, providing scope for stronger operating leverage as utilisation improves. LASD, meanwhile, continues to build on its expanded warehouse capacity, easing logistics pressures, broadening its presence in higher-margin pharmaceutical and healthcare categories, and carefully managing working capital to enhance shareholder value.
  • Continued export expansion across the wider LASCO group also provides an avenue to diversify revenues beyond the domestic market. However, even the strongest families face challenges. The ongoing US-Iran conflict could drive oil prices higher and disrupt global supply chains, creating risks for LASM's raw material costs and LASD's reliance on imported goods.
  • Despite LASD delivering the stronger earnings performance, the market has rewarded LASM more heavily so far this year. LASM’s stock has advanced 29.7% year-to-date, compared with just 0.9% for LASD, to close at $7.47 and J$3.41, respectively, on Wednesday, August 5, 2026. Even after LASM’s rally, however, both companies continue to trade below their sector benchmark. LASM trades at a P/E of 11.2x, while LASD trades at 10.0x, compared with the Main Market Manufacturing & Distribution sector average of 17.6x.

(Sources: JSE & NCBCM Research)