Wilcon Depot profit drops 27.5 percent

HOME improvement and construction supply retailer Wilcon Depot, Inc. reported a 27.5-percent drop in net income for the first quarter of 2025 to P536 million, as gross profit slipped and operating expenses climbed.

Net sales for the quarter came in at P8.4 billion, up 1.2 percent year-on-year (YoY), driven primarily by new store contributions, but same-store sales declined by 3.6 percent, underscoring sluggish consumer demand in the early part of the year.

Despite the income slump, the company expressed optimism for a turnaround in the second half, citing improved daily sales momentum during the recent Holy Week holiday period in April.

"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," Wilcon President Lorraine Belo-Cincochan said.

She disclosed that daily sales before and after the Easter holidays in April showed encouraging trends that could lift earnings performance later in the year.

Operating expenses in the first quarter climbed 7.8 percent to P2.66 billion, attributed to higher depreciation and lease-related costs from newly opened branches, along with increased salary expenses.

Gross profit declined 1.7 percent from a year earlier to P3.264 billion as the company faced thinner margins across both exclusive and non-exclusive product categories.

Wilcon opened two new stores during the quarter — one depot in North Luzon and one Do-It-Wilcon (DIW) format in Metro Manila — bringing its total store count to 102.

Sales from depot-format stores, which make up the bulk of Wilcon's business, rose 1.8 percent to P8.116 billion, while same-store sales dropped 3.1 percent compared to the previous year.

DIW stores, accounting for 3.1 percent of total sales, posted a robust 11.1 percent YoY growth.

Belo-Cincochan noted that newer branches — those less than a year old — have begun to generate positive earnings after having struggled throughout 2024.

"We are also encouraged by the performance of our below one-year-old stores, which generated positive earnings as a whole, after quarterly quarterly negative results all of last year and despite a very soft market during the first two months of the year," Belo-Cincochan said.

"We are hoping that this indicates a growing sales trend that will be sustained from here on," she stated.

Project sales, meanwhile, fell sharply by 67.2 percent as no new large-scale projects were booked during the quarter.

As a result, Wilcon said it may integrate project sales with depot figures going forward, given their diminishing contribution.

Wilcon Depot shares on Monday dropped 30 centavos, or 4.35 percent, to close at P6.59 apiece.