Wilcon Depot Inc., a leading home improvement and construction supplies retailer, said Friday it booked a net income of P908 million in the third quarter, down 17.8 percent year-on-year on higher operating expenses and weak sales.
Wilcon said in a stock exchange filing third-quarter net sales were flat at P8.79 billion because of the slowdown in foot traffic and transaction count in old stores. As a result, same-store-sales declined 5.7 percent year-on-year.
Operating expenses accelerated by 17.4 percent to P6.562 billion on the back of expansion-related operating expenses.
Wilcon expects new stores’ operating expense to drag net income until the fourth quarter as the company continues to expand its network.
“Overall demand for major home improvement and finishing construction supply continues to be soft for retail, but resumption of projects by major developers increased project sales by 75.5 percent. Although project sales only account for 1.4 percent of total net sales, the buyers of these projects are potential Wilcon customers,” said Wilcon president and chief executive Lorraine Belo-Cincochan.
Net income also declined by 7.9 percent in the nine-month period to P2.72 billion, while net sales improved by 4.9 percent to P29.94 billion.
Belo-Cincochan said Wilcon would still pursue its store network expansion as it aims to deliver on its commitment to have 100 stores by 2024, despite the challenging economic environment.
Wilcon opened seven stores since the start of the year while three more branches are slated for opening before the end of the year.
“We will also be reaching our 100-store target by 2024, a year earlier than promised. We are willing to make these short-term sacrifices as we want to be well-positioned to capture more market share in this still high potential, highly fragmented market,” Belo-Cincochan said.
