Wilcon Depot Inc., the Philippines’ leading home improvement and finishing construction supplies retailer, reported a 22.3 percent drop in net income to P2.12 billion in the first nine months of the year.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said net sales dipped one percent to P25.68 billion during the nine-month period.
Wilcon President and CEO Lorraine Belo-Cincochan said that the softness of the demand for major home improvement and finishing construction supply persisted through the third quarter.
“The incessant rains and bad weather also did not help, which historically tends to postpone or delay construction projects,” she noted.
Belo-Cincochan added that “we’re nearing completion of our 100-store target, we now have 98 stores and we expect to open our 100th branch before the end of the year.”
“While expansion-related expenses have been the major drag on net income, we still believe that we have to be well-positioned to capture more market share as customer preference even for planned purchases has been trending toward convenience and accessibility especially since the pandemic," she added.
“As always, we remain customer-focused and constantly improving our service delivery, taking advantage of technology to consistently give excellent value to our customers throughout the country,” she also said.
While new-store sales added five percent to last year’s same-period total sales, comparable sales, on the other hand, offset the increase as these were lower by 5.9 percent.
During the third quarter of 2024, Wilcon opened three new depots, one in Visayas, one in Northern Luzon, and one in Southern Luzon, bringing the total number of branches to 98 by the end of the period.
On a per format basis, sales from the depot-format stores totaled P24.65 billion, comprising 96 percent of total net sales. This was lower by 1.5 percent year-on-year.
Sales from new depots contributed an additional 4.3 percent to the nine-month 2023 total sales but same store sales declined by 5.8 percent.
The smaller format, Do-It-Wilcon, which includes the original Home Essentials stores, recorded net sales of P738 million, growing by 34.3 percent year-on-year, contributed mainly by new Do-It-Wilcon stores.
Same-store sales for the format declined by 4.1 percent, traced mainly to the lower sales of old Home Essentials stores.
The remaining 1.1 percent of total net sales was accounted for by project sales or sales to major institutional accounts, which amounted to P294 million, lower by 20.3 percent year-on-year.
Gross profit amounted to P10.13 billion for the period, lower by 1.1 percent year-on-year, mainly as a result of the decline in net sales.
Operating expenses, including lease-related interest expense, increased to P7.64 billion for the period, 8.7 percent higher year-on-year.
The increase was attributable mainly to expansion-related expenses such as trucking, depreciation and amortization, manpower, rent and utilities.
Operating net other income amounted to P311 million, lower by 23 percent year-on-year. The decline is due primarily to the re-classification of P77 million of the allowance for inventory losses provided in the second quarter to loss due to fire upon the completion of the investigation and reconciliation reports.