Soft demand continues to affect Amway’s sales

PETALING JAYA: Amway (M) Holdings Bhd could continue to face the effects of softening consumer demand for its products in the near term, analysts say.

TA Research noted that demand for non-essential goods appears to be weakening, while continued upward pressure on product costs is likely to persist for the direct-selling company.

Additionally, the research house highlighted that Amway’s outlook for this year remains challenging, weighed down by global economic uncertainty.

CIMB Research also expects continued softness in Amway’s top line in the near term, as consumers prioritise essential spending.

“While the challenging demand environment may weigh on revenue growth, we anticipate Amway to exercise prudent cost management and optimisation strategies to help mitigate margin pressures and support profitability in the near term,” the research house said.

Amway recently reported a weaker-than-expected first-quarter core net profit of RM13.2mil, marking a 58.9% year-on-year (y-o-y) decline.

This also represents the ninth consecutive quarter of y-o-y revenue decline.