LISTED home improvement and construction supply retailer Wilcon Depot, Inc. reported on Thursday a net income of P855.77 million for the second quarter (Q2), down 15.4% from P1.01 billion the previous year.
The decline was attributed to higher operating expenses and a decrease in same-store sales growth, the company said in a disclosure.
Net sales for the quarter increased by 4% to P8.62 billion from P8.29 billion during the same period last year, while a slowdown in foot traffic and transaction count in old stores led to a 3.4% year-on-year drop in company-wide same-store sales growth.
“[We] had a slower growth in the second quarter mainly due to the decline in foot traffic in our old stores,” said Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan.
“While our sales still grew modestly in the second quarter, this was not enough to cover the increases in our fixed costs, which comprises the bulk of our [operating expenses],” she added.
Wilcon said that its operating expenses for the period, which include lease-related interest expenses, grew by 20.3% to P2.37 billion from P1.97 billion due to expansion activities.
Meanwhile, during the first half, the company posted a 2.1% decline in net income to P1.82 billion from P1.86 billion during the same period last year, likewise driven by its “flat” comparable sales growth coupled with the increase in operating expenses.
Its top line during the six-month period went up by 7.6% to P17.15 billion from P15.94 billion the prior year, driven by contributions from new stores.
Its operating expenses, which include lease-related interest expenses, in the six-month period climbed by 21.4% to P4.68 billion from P3.86 billion the previous year.
“Expansion-related expenses primarily drove the increase particularly depreciation and amortization and manpower expenses,” the company said.
Four new stores were added during the half while two bottom-dwelling, smaller format branches were closed, ending the half with 85 stores.
“We are still pursuing our expansion plans at our current pace. We want to be ready and conveniently within reach by our customers when demand picks up,” Ms. Belo-Cincochan said.
“We still have seven ongoing construction projects, not including several that are in the planning or permitting stage, which are set to be opened next year,” she added.
Shares for Wilcon fell by 2.08% to P23.5 apiece on Thursday. — Adrian H. Halili
