Wilcon Depot income in H1 tumbles as store visits drop

By VG Cabuag @villygc

Wilcon’s President and CEo Lorraine belo-Cincochan said t hursday the company recorded slower growth in the second quarter.

“We have a high base since there was pent-up demand for the same period last year as we just came out of the omicron surge plus there was a slowdown in private construction especially in April with its consecutive long weekends,” she said.

“Historically, months with lon- ger holiday stretches were periods with relatively lower sales since construction projects are usually also paused to save on labor cost or homeowners go on holiday themselves. While our sales still grew modestly in the second quarter, this was not enough to cover the increases in our fixed costs, which comprises the bulk of our opex [operational expenses].”

She added that despite the soft- ening of demand in the home improvement sector, Wilcon remains committed to pursuing its expansion plans.

“We are still pursuing our expansion plans at our current pace. We want to be ready and conveniently within reach by our customers when demand picks up. We have opened four new stores so far and tomorrow we are opening another depot. We still have seven ongoing construction projects, not including several that are in the planning or permitting stage, which are set to be opened next year.” t he increase was mainly driven by the contribution of new stores as comparable sales growth fell 0.2 percent for the first half. t he company said four new stores were added during the period while two bottom-dwelling, smaller format branches were closed, ending the period with 85 stores. t he depot format accounted for 97 percent of net sales, the home essentials format 2 percent and the remaining 1 percent by project sales. o p erating expenses including lease-related interest expense went up by 20 percent or P397 million year-on-year to P2.36 billion. t he increase is mainly attributable to expansion-related expenses, the company said.

Net sales in the first half reached P17.15 billion, 7 percent higher from the previous year’s P15.94 billion.

Net sales for the second quarter alone rose 4 percent to P8.62 billion, mainly due to the contribution of below one-year stores. Slowdown in foot traffic and transaction count in old stores drove companywide comparable sales or samestore sales to decline by 3.4 percent.

Comparable transaction count dropped by 7.4 percent while comparable ticket size still grew by 4.4 percent.

Net income for the quarter slid by 15 percent to P856 million, the company said.