Wilcon Depot Inc. clocked in 11.1 percent net earnings in the January to September period, to P1.54 billion from P1.39 billion in 2018 on the back of improved sales mix favoring higher margin products, adding to net sales growth.
The listed home improvement and finishing construction supplies retailer said third quarter net income alone rose 15.5 percent to P549 million.
“We are pleased with our performance in the third quarter. 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,” Wilcon president and chief executive officer Lorraine Belo-Cincochan said in a disclosure to the stock exchange.
For the nine-month period, Wilcon’s net sales rose 17.4 percent to P18 billion from last year’s P15.359 billion. Depot format stores accounted for 95.8 percent of the total net sales at P17.3 billion, up 17.7 percent. Same-store sales grew 5.2 percent in the first nine months.
Wilcon said it added three new depot stores in the third quarter, bringing stores in that format to 48 and overall stores to 55 as of September.
Meanwhile, the smaller format Home Essentials accounted for 2.7 percent or P492 million of the net sales, up 6.4 percent, with same-store sales rising 3.4 percent.
Project sales, or sales to large property developers and to the hospitality industry, accelerated 20.6 percent to P260 million, accounting for 1.4 percent of the firm’s net sales.
Gross profit rate rose to 32.8 percent in the nine-month period from 31.3 percent last year, driven by the bigger share of higher-margin exclusive and in-house brands in net sales, as well as improving margins of non-exclusive products.
Meanwhile, operating expenses also rose 24.3 percent to P3.910 billion due to Wilcon’s continued store expansion, as well as the adoption of new accounting standards for leases. Wilcon said significant increases were also registered in manpower expenses, utilities, trucking and taxes and licenses.
Wilcon spent P2.029 billion in capital expenditures for the first three quarters primarily for the construction of new stores, warehouses and extensions and renovations.