Anemic demand pares Wilcon Depot Q2 earnings

MANILA, Philippines — Construction retailer Wilcon Depot, Inc. struggled to make headway in the second quarter as foot traffic across its stores retreated. 

In a disclosure sent to the Philippine Stock Exchange, Wilcon reported net income contracted 14.9% year-on-year to P856 million in the second quarter. Gross profits rose 5.6% on-year to P3.4 billion in the same period. 

“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 CEO Lorraine Belo-Cincochan.

“We have a high base since there was pent up demand for the same period last year as we just came out of the Omicron surge plus there was a slowdown in private construction especially in April with its consecutive long weekends,” she added.

Wilcon’s top executive explained that months that have longer holidays entailed sales would decline since construction projects are put on hold to cut down on costs. 

Net sales in the April-June period grew, inching up 4% on-year to P8.62 billion as Wilcon attributed the expansion to less-than-a-year-old stores. Belo-Cincochan explained that despite this growth, they were unable to manage increasing fixed costs. 

Same store sales growth proved wanting, inching down 3.4% on-year in the second quarter. Transaction count declined 7.4% in the same period.

Operating expenses expanded by 20.2% to P2.364 billion in the second quarter, as the construction retailer cited “expansion-related expenses.” 

That said, Wilcon reported rent and net other income rose 23.1% on-year to P95 million in the second quarter owing to improving supplier support for marketing and promotional expenses. 

Shares in Wilcon currently trade 2.29% down at P23.45 apiece as of 2:33 Thursday afternoon. — Ramon Royandoyan