Gadgets retailer Upson International Corp. said Monday its net income in 2023 reached P464.2 million, down 13.7 percent from P537.85 million in the same period last year despite higher sales.
Upson said in a disclosure to the stock exchange net revenues reached a record P10 billion in 2023, up 5.8 percent from P9.46 billion in 2022, following the opening of new stores.
“2023 was a year of investment and transition, evolving from being privately held to becoming a public company” said Upson chief executive Arlene Sy.
“For the first time in our history, revenues surpassed P10 billion as we increasingly reap the benefits from our expanding footprint. This strong foundation is what we will build on this year. Our focus is on serving our customers better to unlock the full potential of the new stores and deliver sustainable and profitable growth,” Sy said.
Upson opened 25 new stores in 2023, including 12 in the fourth quarter, ending the year with 232 stores. Upson introduced 12 tech brands to broaden its product offering. It also began to set up Apple corners in select stores which brought customers greater access to the brand.
Upson now carries 115 tech brands in its portfolio.
Computers were the primary driver of the sales increase, led by mid-range laptops.
Printing and communication products also contributed positively, partly offset by decreases in sales of storage and components.
Upson said that by geography, markets remained broadly stable, with Visayas posting the fastest growth followed by North Mindanao.
The cost of inventories sold went up 8.9 precent to P7.9 billion, resulting in a lower gross margin of 20.8 percent, compared with 23 percent in 2022.
The margin contraction was due to revenue mix and lower product margin rates from increased promotions, including product bundling and price discounts, the company said.
Operating expenses rose 9.5 percent to P1.7 billion in support of the company’s strategic growth initiatives, specifically relating to store and warehouse network expansion.
These higher expenses were mostly lease payments, contracted and other services, depreciation and amortization and personnel-related costs.
As a percentage of sales, operating expenses went up from 16.2 percent to 16.7 percent in 2023.
