MANILA, Philippines — Wilcon Depot Inc., the country’s leading home improvement and finishing construction supplies retailer, reported a net income of P1.818 billion for the first half of the year, down by 2.1 percent or P38 million year-on-year.
This as sales growth eased as home renovation activities slowed down. At the same time, operating expenses increased, said Wilcon’s president and CEO Lorraine Belo-Cincochan.
“We had slower growth in the second quarter mainly due to the decline in foot traffic in our old stores. 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 said.
While sales still grew modestly in the second quarter, this was not enough to cover the increases in fixed costs, which comprises the bulk of the operating expenses, Wilcon said in a regulatory filing.
Wilcon said it remains committed to its expansion plan despite the softness in the home improvement market.
“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. We have opened four new stores so far and tomorrow we are opening another depot,” she said.
The company has seven ongoing construction projects, not including several that are in the planning or permitting stage.
Net sales for the first half amounted to P17.15 billion, or 7.6 percent higher year-on-year, driven by the contribution of new stores as comparable sales growth was flat at 0.2 percent.
The company added new stores during the period while two bottom-dwelling, smaller format branches were closed, ending the first half with 85 stores.
Of the different formats, the depot format accounted for 97 percent of net sales, the home essentials format two percent and the remaining one percent by project sales.
Gross profit increased by 9.9 percent to P6.77 billion, driven mainly by the expansion in gross profit margin from 38.6 percent to 39.5 percent year-on-year.