Stronger sales lift Wilcon H1 profit to P1.2B

MANILA, Philippines — Wilcon Depot Inc. grew first-half earnings by 3.5 percent as stronger customer traffic and sales volumes offset pressure from higher operating costs and a weaker product mix.

On Tuesday, the Belo-led retailer said earnings reached P1.204 billion in the first half, up P41 million from a year earlier. Meanwhile, net sales climbed 10.9 percent to P18.98 billion, driven by comparable sales growth of 6.6 percent.

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All regions, including project sales, posted positive comparable sales growth during the period. Depots, which made up 96.3 percent of net sales, generated P18.27 billion, up 10.9 percent, while same-store sales rose 6.6 percent.

In contrast, smaller-format Do It Wilcon stores posted net sales of P607 million, up 12.4 percent, while project sales contributed P96 million.

Gross profit increased 7 percent to P7.08 billion. However, gross margin narrowed to 37.3 percent as lower-margin non-exclusive products outpaced exclusive and in-house brands. As a result, the share of exclusive and in-house brands in total net sales slipped to 50.5 percent from 52.3 percent a year earlier.

Meanwhile, operating expenses, including lease-related interest, rose 8 percent to P5.71 billion, mainly due to higher depreciation and amortization, manpower, utilities, and trucking costs. Wilcon said most of the increase occurred in the second quarter due to bulk lease renewals, annual salary adjustments, and rising utility rates.

For the second quarter alone, net income rose 2.4 percent to P641 million as net sales jumped 12.7 percent to P9.81 billion. Comparable sales growth accelerated to 8.4 percent.

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READ: Wilcon Depot 9-month income drops to P1.866B

Wilcon president and CEO Lorraine Belo-Cincochan said every region posted positive same-store sales growth during the quarter, although the shift toward lower-margin non-exclusive products weighed on its blended gross margin.

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“We are encouraged by the gains in customer count and sales volume,” Belo-Cincochan said, adding that these gave Wilcon room to improve its product mix and manage costs in the second half.

Wilcon opened five new stores in the first half and plans to add three more for the rest of the year. So far, the retailer has spent P1.2 billion in capital expenditures, mostly for new stores and warehouses. /pai