Wilcon income up 11% to P1.54 B

Home and office supplies company Wilcon Depot Inc. reported an 11.1 percent hike in its net income in the first nine months of 2019, driven by an improved sales mix.

In a disclosure to the Philippine Stock Exchange, Wilcon said its net income during the period went up to P1.54 billion from P1.39 billion in the same period last year.

“The increase was driven mainly by the sustained margin expansion due to the improving sales mix in favor of higher margin products and the growth in net sales,” Wilcon said.

Net sales in the nine-month period grew 17.4 percent to P18.04 billion from P15.36 billion in the same period last year.

Depot format stores accounted for 95.8 percent of total net sales as it grew 17.7 percent to P17.28 billion, with same-store sales growth of 5.2 percent. Three new depots were added in the third quarter, bringing to 48 the total number of depots and 55 stores overall by the end of the quarter.

In addition, same-store sales growth of the depots for the quarter improved to 6.5 percent from the previous quarter’s 1.4 percent.

The smaller format Home Essentials contributed 2.7 percent or P492 million to sales during the period, up 6.4 percent from the same period in 2018, with same-store sales growth of 3.4 percent.

Moreover, project sales or sales to large property developers and to the hospitality industry grew 20.6 percent to total P260 million for the year. This accounted for 1.4 percent of the company’s net sales.

“We are pleased with our performance in the third quarter, Wilcon president and CEO Lorrine Belo-Cincochan said.

“Our gross profit margin continued to improve and comparable sales growth rate increased from 1.9 percent to 6.6 percent quarter-on-quarter, which partly offset the impact of our increasing operating expenses attendant to our store network expansion,” she added.

Gross profit for the period amounted to P5.91 billion, 23 percent higher from the P4.81 billion last year.

“Gross profit margins maintained its growth in view of the increasing contribution of the higher-margin exclusive and inhouse brands which now account for 49.2 percent of net sales and from the improving margins of non-exclusive products as sales volume continued to rise and cash payment discounts are availed,” Wilcon said.

Operating expenses jumped 24.3 percent to P3.91 billion from P3.15 billion, mainly due to the opening of new stores and the adoption of the new accounting standard for leases starting this year.

Wilcon said capital expenditure for the three-quarter period reached P2.03 billion, used for the construction of new stores, warehouses and extensions or renovations of a few existing stores.