Wilcon Depot Inc. reported a dip in net income for the third quarter, its first fully operational quarter in 2020, to P533 million from the P549 million earned in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said net income fell 42.6 percent to P886 million in the first nine months of the year from P1.54 billion in the same period of 2019.
Net sales for the third quarter totaled P6.749 billion, up by 7.9 percent year-on-year. The increase was accounted for by sales from new stores as comparable sales growth was flat at 0.4 percent.
For the first nine months, net sales dropped 12.5 percent to P15.79 billion this year from P18.04 billion in 2019.
“It can be recalled that upon the re-opening of the Luzon branches on May 16, 2020, there was an immediate uptick in foot traffic and sales. The ramp up continued until July with comparable sales growing by 3.1 percent but was disrupted in August when Metro Manila and some nearby provinces were placed back under stricter quarantine measures for two weeks,” Wilcon said.
It noted that, “All branches remained open, with shortened operating hours, but foot traffic again dropped. After transitioning back to looser quarantine measures, sales gradually picked up in September resulting in a 2.9 percent growth in comparable sales.
“We are very encouraged by the ramp up of our sales in the third quarter and we are hopeful that the growth trajectory will continue in the fourth. We in fact opened another branch in Laguna this September bringing to 61 our total number of stores,” Wilcon President Lorraine Belo-Cincochan.
She noted that, “It is particularly challenging though that we have such a high base as we did extremely well in the fourth quarter of 2019. We are continuously studying ways by which we can improve efficiencies given our results amid this pandemic, but we are also trying to balance this vis-à-vis our long-term goals and our obligations and commitments to all our stakeholders – including our customers, suppliers, employees and communities.”
Belo-Cincochan added that management believes that the market will continue to improve and the expansion plan which is focused on expanding Wilcon’s reach outside of its base, Metro Manila, is still going in the right direction and still on track.
Private construction is gradually picking up in Metro Manila and more so in the provinces. In the third quarter, only Metro Manila stores registered negative growth while the rest of the branches already turned in positive same store sales growth.
For the quarter, same store sales of the depot format grew by 1.5 percent, while the Home Essentials declined by 11.1 percent and project sales by 54.3 percent.
The depot format accounted for 97.3 percent of net sales, the Home Essentials for 2.1 percent and projects for 0.6 percent for the quarter. Gross profit grew by 10.3 percent to P2.31 billion for the quarter. The expansion was mainly driven by the increase in the contribution of exclusive and in-house brands to 51.4 percent in 2020 from 49.2 percent for the same nine-month period in 2019.