Wilcon Depot (WLCON) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached PHP 8.41 billion, up 1.2% year-on-year, driven by new store openings in Tuba, Benguet, Tuazon, Cubao, and Metro Manila, despite a 3.6% decline in comparable sales.

• Net income after tax dropped 27.5% to PHP 536 million due to margin compression and higher operating expenses.

• Transaction count increased by 1%, but average ticket size fell by 4.5%.

• Gross profit margin contracted to 38.8%, mainly due to margin pressure in both exclusive and non-exclusive brands.

• Two new stores opened: one Do It Wilcon and one depot, bringing total branches to 102.

Financial highlights

• Gross profit margin was 38.8%, EBITDA margin 12.6%, EBIT margin 8.3%, and net profit margin 6.4%.

• Gross profit fell by PHP 56 million (1.7%) to PHP 3.264 billion.

• Operating expenses rose 4.6% to PHP 2.408 billion, mainly from salaries, depreciation, and expansion.

• Interest expense increased 50.4% year-on-year, mainly from lease liabilities.

• Total assets increased 5.5% to PHP 41.2 billion; liabilities rose 20% to PHP 18.3 billion; equity decreased 3.9% from December 2024.

Outlook and guidance

• Management expects low positive same-store sales growth for the year, improving from earlier flat guidance.

• Store expansion target remains at 8 new stores for the year, with some possible delays to stay within CapEx budget.

• Focus on optimizing product mix, enhancing exclusive brands, and improving customer experience both online and offline.

• Reopening of a previously burned-down store in June is expected to boost SSG.

• Margins are expected to remain stable for 2025, with long-term potential for double-digit margins.