Gokongwei-led Robinsons Retail Holdings Inc. (RRHI) grew its first quarter net income by 21.7 percent year-on-year to P1.2 billion on higher sales and improved margins.
Three-month operating income increased by 10 percent year-on-year on the back of the 20-basis point gain in gross margins and same store sales growth (SSSG) of 6.4 percent for the period, coupled with an increase in foreign exchange gains.
Core net earnings – which exclude interest from bonds, equitized net earnings from RHHI’s 40 percent stake in Robinsons Bank and unrealized foreign exchange adjustments – increased by 13.7 percent year- on-year to P958 million.
Consolidated net sales expanded by 12.6 percent in the first quarter to P29 billion, brought about by the strong SSSG alongside sales contribution of newly-opened stores.
All retail formats registered positive SSSG. In a disclosure to the Philippine Stock Exchange on Friday, RRHI said its business had “substantially” gained from the positive impact of the new tax reform package, which puts more money into people’s pockets by reducing individual income taxes.
The supermarket segment reported an 8-percent year-on-year expansion in first quarter SSSG while specialty stores, do-it-yourself (DIY) home improvement, convenience stores, drugstores and department stores grew SSSG at the pace of 10.8 percent, 5 percent, 5.5 percent, 2.4 percent and 0.9 percent, respectively.
Blended gross profit increased at a much faster rate than topline growth in the first quarter, gaining 13.4 percent year-on-year to P6.5 billion. Gross margins expanded by 20 basis points to 22.4 percent, attributed to increasing scale, improvement in category mix and margin windfall from increase in prices.
Meanwhile, cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 11.9 percent to P1.8 billion in the first quarter, with EBITDA margin sustained at 6.4 percent.
The supermarket segment continued to be the group’s largest segment, accounting for 46.8 percent of consolidated net sales and 42.8 percent of consolidated EBITDA.
RRHI has a total of 1,715 stores consisting of 154 supermarkets, 49 department stores, 195 DIY stores, 489 convenience stores, 487 drugstores and 341 specialty stores. These are on top of the 2,031 franchised stores of the Generics Pharmacy (TGP).
The group’s gross selling area, excluding that of TGP, expanded by 8.7 percent year-on-year to 1.15 million square meters.