Metro Retail Stores Group Inc. (MRSGI) of Cebu’s Gaisano family reported a 27 percent drop in net income to P100.4 million in the first half of 2024 from P136.8 million in the same period last year.

In a disclosure to the Philippine Stock Exchange (PSE), the firm explained that “despite the respectable cash earnings, increases in non-cash charges and depreciation owing to the Company’s expansion program pulled down the overall net income after tax.”

MRSGI generated P18.2 billion in net sales for the first half of 2024, representing a six percent growth from the P17.1 billion generated last year, driven by improved sales of existing stores and incremental sales from newly opened stores.

For the second quarter, the company posted P9.3 billion in net sales or a seven percent increase from last year.

Same-store sales for the quarter ending June expanded by 4.7 percent compared to the same quarter a year ago and stronger than the 2.8 percent growth registered in the first quarter – bringing the blended same-store sales growth for the first half of 2024 to 3.8 percent.

By business, food retail sustained strong sales growth for the first six months at 7.9 percent on basic grocery items and additional sales from the supermarkets that were opened last year. General merchandise was flattish at 0.9 percent versus the prior year.

Blended gross margin in the first half of 2024, however, decreased to 20.7 percent from 21.9 percent in the same period last year, due to the higher share of food retail in total business, notably the lower margin wholesale category and the unwinding of excess inventory.

The decline in margin was slightly offset by the improvement in operating expense to sales ratio to 20.3 percent versus the prior year’s 21 percent, as the company continued to realize operating efficiency from cost management initiatives.

With the lower blended margin counterbalanced by the savings on expenses, six-month EBITDA (earnings before interest, taxes, depreciation, and amortization) ended at P798.3 million, flattish versus the prior year’s P802.5 million.

For the second quarter, EBITDA was 4.3 percent higher than the same period last year, better than the first-quarter performance.

“With the improved momentum from the second quarter and going into the second half of 2024, the Company continues to hold an optimistic outlook for the rest of the year on the back of improvement in sales growth, cost management, and the projected opening of new stores planned in the third and fourth quarters,” MRSGI President and COO Manuel Alberto said.

To date, Metro Retail operates a total of 64 branches across Luzon and the Visayas under the store formats Metro Supermarket, Metro Department Store, Super Metro Hypermarket, and Metro Value Mart.

In its recent Annual Stockholder's Meeting last May 2024, MRSGI has set a goal to have a network of 160 stores by 2027.