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Wilcon Depot, Inc. (Wilcon), the country’s leading home improvement and finishing construction supply retailer, expects its earnings to return to a growth trajectory even though it continued to decline in the first quarter as it observes a rising trend in consumer spending.
“Despite the drop in net earnings, which was mainly driven by lower sales in the first two months of the year, we are expecting a turnaround especially in the second half given the encouraging average daily sales right before and right after the long Easter holidays in April,” said Wilcon President Lorraine Belo-Cincochan.
She noted that, “Should this sales trend continue and especially if it improves further, we expect to reverse the decline in net earnings in this quarter or later in the year.”
Belo-Cincochan added that, “we are also encouraged by the performance of our below one year-old stores, which generated positive earnings as a whole, after quarterly negative results all of last year and despite a very soft market during the first two months of the year. We are hoping that this indicates a growing sales trend that will be sustained from here on.”
Wilcon reported a 27.5 percent drop in net income to 536 million in the first quarter of 2025, driven by lower gross profit and higher operating expenses.
Net sales inched up 1.2 percent to ₱8.41 billion mainly due to sales from new stores as comparable (same-store) sales declined 3.6 percent for the quarter under review.
Two new stores were opened during the quarter, one depot in North Luzon and one smaller format Do-It-Wilcon (DIW) in Metro Manila, bringing the total number of branches to 102.
On a per format basis, the depots’ net sales of ₱8.12 billion accounted for 96.5 percent of total net sales during the quarter, up 1.8 percent year-on-year, driven by the contribution of new stores with same store sales lower by 3.1 percent.
The DIW stores accounted for 3.1 percent of total net sales, with ₱258 million. DIW net sales grew by 11.1 percent with a 7.4 percent same store sales growth.
Project sales contributed the remaining 0.4 percent, declining by 67.2 percent as no new major projects were served during the year.
“Should project sales’ contribution stay below one percent, we shall be integrating project sales with our depot sales subsequently,” the firm said.
For the quarter, gross profit was lower by 1.7 percent year-on-year to total ₱3.26 billion in view of the margin rate contraction in both the non-exclusives and the exclusives and in-house brands categories with the continued popularity of Wilcon’s best deals offerings.
The contribution of in-house and exclusive brands slid slightly to 52.2 percent from 52.6 percent, traced mainly to the decline in project sales.
Operating expenses including lease-related interest expense rose 7.8 percent to ₱2.66 billion due to the increase in depreciation for new store buildings, lease-related interest expense covering new leases for new stores and salaries partly offset by the decrease in trucking and short-term rent.
