WILCON Depot, Inc. reported 15.5% higher earnings in the third quarter, as it focused on bringing higher margin products to its stores.
The listed home improvement retailer said its net income in the July to September period stood at P549 million, bringing the year-to-date figure at P1.54 billion, up 11%.
“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,” the company said in a statement.
Wilcon’s net sales during the nine-month period improved 17.4% to P18.04 billion.
During the nine-month period, depot-format stores, which accounted for 95.8% of total revenues, generated P17.28 billion in sales. This was an 18% increase from the same period last year.
The company opened three new depot stores during the July to September period, raising its total depot stores to 48 and overall stores to 55.
Home Essentials stores, a smaller format store that Wilcon operates, posted P492 million in revenues for the nine months, up 6.4% from last year.
Wilcon said sales that the company gets from large property developers and the hospitality industry rose 21% to P260 million for the three quarters.
Operating expenses during the nine months jumped 24.3% to P3.91 billion as the company continued investing in new stores. Interest expenses added P208 million, soaring 8,764% from a year ago, due to increases in depreciation and amortization and significant growth in manpower expenses, utilities, trucking and taxes and licenses.
“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% to 6.6% quarter-on-quarter, which partly offset the impact of our increasing operating expenses attendant to our store network expansion. Hence, we were able to register a 15.5% net earnings growth for the third quarter,” Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan said in the statement.
Wilcon spent P2.03 billion for capital expenditures during the nine-month period, which went to the construction of new stores and warehouses and extensions or renovations in some old stores.
Shares in Wilcon shed 0.10 point or 0.58% to close at P17.10 each on Thursday. — Denise A. Valdez