SSI earnings plunge in 3rd quarter as costs rise

EARNINGS of Store Specialists, Inc. (SSI) declined by 43% in the third quarter, as rising sales failed to offset higher expenses.

In a regulatory filing, the Tantoco family-led company, which distributes brands such as Gucci, Zara and Payless in the Philippines, reported a P65.4million net income for the third quarter from P115.3 million a year ago.

“Given the stabilization of the Group’s Q3 2016 gross profit margins as compared to the year ago period, as well as the reduction in joint venture losses following the Wellworth divestment, core net income during Q3 2016 was at P105.3 million a decline of 13.3% as compared to Q3 2015,” SSI said.

For the first nine months of the year, SSI earnings dropped 56% to P306.1 million, from P701 million a year ago.

Third quarter net sales rose 4.6% to P4.04 billion, pushing January-September sales 7% higher to P12.6 billion.

“The increase in net sales was driven by improvements in same-store sales growth during the first half of the year and sales of stores open for less than 12 months. Given its diversified brand portfolio and its strategically located store network, the Group continues to benefit from increasing consumer demand and interest in specialty brands, the company said.

SSI said it closed 114 stores covering 9,724 square meters in the first nine months of the year, and opened 42 new stores with 4,062 sq. m. As of end- September, its store network stood at 720 versus 781 stores it had a year ago.

The company’s portfolio of brands stood at 114 as of end-September, as it discontinued Desigual, Fruits & Passion and Guiseppe Zanotti.

Third quarter operating expenses went up 12% to P1.73 billion, bringing the nine-month total to P5.4 billion, a 12.6% increase from a year ago. —