Online stockbroker Colfinancial.com said consumption-related companies performed below expectations in of the second quarter of the year as companies started to feel the impact of normalizing demand and higher operating costs.
Among the 13 companies Colfinancial covers, seven delivered weaker-than-expected earnings, namely D&L Industries Inc., Emperador Inc., Puregold Price Club, SSI Group Inc., Universal Robina Corp. (URC), Wilcon Depot Inc. and Max’s Group Inc.
It said five firms were in line with forecasts, namely Century Pacific Food Inc., AllHome Corp., Monde Nissin Corp., Shakey’s Pizza Ventures Inc. and Robinsons Retail Holdings Inc., while only one outperformed — Jollibee Foods Corp.
Colfinancial said earnings of consumer companies were flat, inching up by a median rate of 0.5 percent as results were largely mixed.
Among the three sectors, restaurants posted a growth of 31 percent while retailers grew 0.5 percent. Manufacturers’ earnings contracted by a median of 4.3 percent, as a result of the impact of rising costs and weakened consumer spending.
Colfinancial noted generally weaker performance among manufacturers, with D&L, Emperador and Monde Nissin delivering lower earnings, while Century Pacific and URC recorded higher profits.
“Similarly, Emperador booked lower earnings, down 11.3 percent on a comparable basis, while profits of Monde Nissin declined due to the continued margin deterioration of its alternative meat business. On the other hand, earnings of consumer staple manufacturers Century Pacific and URC continued to grow on the back of resilient sales and earnings before income tax margin expansion,” it said.
According to Colfinancial, retailers felt the impact of higher operating costs and softer top-line growth.
It said Wilcon, Puregold and Robinsons Retail’s profits were dragged mainly by operating costs arising from new store openings, increased manpower costs and full rental rates.
“In contrast, profits of SSI were buoyed by lower finance costs and higher income from associates while profits of AllHome were lifted by the recovery in gross profits,” the stockbroker added.
Meanwhile, restaurants saw their earnings rise.
Jollibee’s operating income grew 31 percent, tracking ahead of expectations, thanks to resilient profit margins and higher operating leverage, Colfinancial.com said.
Shakey’s saw its bottomline improve by 65.8 percent, buoyed by strong revenues and lower taxes despite thinner profit margins.
“ Max’s reported lower earnings as sluggish topline growth was met with higher direct costs and operating expenses,” Colfinancial said.
