Home design and construction supplies retailer Wilcon Depot Inc.’s net income dipped by 7.9 percent to P2.7 billion in the first nine months of 2023 from P2.9 billion in the same period in 2022 due to higher operating expenses.

However, the firm’s sales for the nine-month period increased by 4.9 percent to P25.9 billion from P24.7 billion in the nine-month period in 2022, according to a disclosure to the Philippine Stock Exchange (PSE).

Wilcon Depot President and CEO Lorraine Belo-Cincochan said that “total net sales grew quarter-on-quarter, but the higher base resulted in a decline in comparative sales by 2.1 percent.”

“Net sales also did not grow enough to cover the increase in operating expenses, over 50 percent of which was contributed by expansion related expenses,” she added.  

“Home Essentials” reported a 19.2 percent increase in sales to P549 million, contributed by new stores and branches that opened from July 2022 to April 2023. However, comparable sales for home essentials declined by 2.2 percent.

Resumption of projects by major developers also managed to increase Wilcon’s project sales by 75.5 percent, but overall demand for major home improvement and construction supplies remained stagnant.

Operating expenses including lease-related interest expenses increased 17.6 percent or P7 billion in 2023 from P6 billion in 2022, driven primarily by depreciation and amortization and manpower expenses.

Meanwhile, gross profit also increased by 6.6 percent to P10.2 billion in 2023 from P9.6 billion in 2022, attributed to an expanded gross profit margin rate from 38.9 to 39.5 percent.

Rebates received from a trade supplier for promotional activity in the first quarter of the year, an increase in rent, other income from suppliers, and delivery fees from customers contributed to P405 million of the firm’s other income for the nine-month period this year.

Belo-Cincochan said the company is pursuing its store network expansion plans, having opened seven stores and is expecting to complete 10 stores by the end of the year.

“We will also be reaching our 100-store target by 2024, a year earlier than promised. We remain customer-focused, always finding ways to improve our service delivery and agility to adjust to the changing consumer preferences with the aid of technology so that we can continue to give excellent value to our customers even as we expand our market reach,” explained Belo-Cincochan.