Wilcon Depot ends H1 with P1.8-B profit

MANILA  -Home improvement retailer Wilcon Depot Inc. ended the first half of the year with a net income of P1.82 billion, lower by about 2 percent that a year ago as costs increased.

Wilcon, which ended the past year with a record high profit, recently warned that its financial performance will be muted in 2023 given the “high base” achieved in 2022.

READ: Wilcon posted record profit in 2022

Lorraine Belo-Cincochan, president and CEO of Wilcon, said in a statement on Thursday that sales were also impacted by “slower growth in the second quarter mainly due to the decline in foot traffic in our old stores”.

“Historically, months with longer holiday stretches were periods with relatively lower sales since construction projects are usually also paused to save on labor cost or homeowners go on holiday themselves,” she said.

“While our sales still grew modestly in the second quarter, this was not enough to cover the increases in our fixed costs, which comprises the bulk of our [operating expenses],” she added.

Wilcon said net sales from January to June this year rose 7.6 percent to P17.15 billion. Cost of sales doubled to P10.4 billion while operating expenses, which includes rental costs from new stores, jumped 21.4 percent to P4.7 billion during the same period.

Gross profit margin in the first semester increased to 39.5 percent from 38.6 percent.

Wilcon said four new stores were added during the first half while two smaller-format branches were closed. The company ended the period with 85 stores.

“We are still pursuing our expansion plans at our current pace. We want to be ready and conveniently within reach by our customers when demand picks up,” said Belo-Cincochan.

“We have opened four new stores so far and tomorrow we are opening another depot. We still have seven ongoing construction projects, not including several that are in the planning or permitting stage, which are set to be opened next year,” she added.