Trinity Securities wrote in its earnings preview that i-Tail Corporation Public Company Limited (SET: ITC) is expected to report a net profit of THB 716 million for 2Q26, marking a 17.8% decline quarter-on-quarter, though representing a 2.9% year-on-year growth. The anticipated dip in quarterly profit is in line with projected sales of THB 5 billion, down 4% QoQ but up 11% YoY.
The company’s YoY growth continues to be underpinned by its core U.S. customer base, although there are emerging signs of recovery in the European and Japanese markets.
However, despite the solid income stream, ITC’s gross margin for 2Q26 is estimated to soften to 23.5%, compared to 24.3% in 1Q26 and 25% in the same period last year. Rising costs, especially for plastic packaging—whose prices tend to fluctuate in tandem with oil prices, have impacted margins, with cost adjustments typically lagging by two to three months.
The report notes that while selling prices have yet to adjust fully to the increased costs, the company’s premium product mix continues to support revenue share. Margin improvement is expected to resume in 3Q26, as ITC implements new pricing schemes.
New Product Development (NPD) remains a key focus, with a significantly higher number of product launches planned for the second half of 2026. This strategy is in line with customer seasonality, as clients tend to unveil new products towards the end of the year.
Looking ahead to 3Q26, margin recovery is anticipated to help boost overall profitability on a quarterly basis. For the full year 2026, ITC is projected to outpace industry growth by a factor of three, with full-year revenue expected to reach THB 19.2 billion—a 5.2% YoY increase.
According to Trinity, the U.S. market will remain the primary growth driver, bolstered by expanded sales in the private label segment. In Europe, the focus is on optimizing product costs to maintain competitive pricing, while the Japanese market will concentrate on delivering new innovations. The ongoing Tailwind Project is set to entail incremental expenses through 2026, but is expected to contribute up to $50 million in operating profit by 2027. ITC’s gross margin for 2026 is forecast in the 23 – 25% range.
Trinity has reiterated its “Speculative Buy” recommendation on ITC, maintaining a 2026 target price of THB 20.90, which is based on a forecast EPS of THB 1.16 and a price-to-earnings (P/E) ratio of 18x (0.5 standard deviations below the average).
Key risks highlighted in the report include foreign exchange volatility, weak recovery in consumer demand, delays or shortfalls in planned investments, and rising inflation rates.
