SM Investments Corp. will continue to see gains as a stronger second half lies ahead, according to analysts.

In an investors note last month, Russ Toribio, analyst at Philippine Equity analyst, said “there was notable recovery in consumer spending in discretionary items such as fashion and home in the second quarter,” which benefited SM Investments’ businesses.

Sales in the fashion segment posted a 10.5- percent year-on-year growth in the same period largely due to back-to-school shopping in preparation for school openings at the start of the third quarter.

Sales in the home segment posted 4.6 percent growth likely related to much warmer weather during the period.

Headline inflation eased to 3.3 percent in August from 4.4 percent in July, bringing the national average inflation from January to August to 3.6 percent. 

“Moderating inflation increases the purchasing power of consumers which will drive growth in retail and leisure business,” Toribio said.

Gilbert Lopez, head of research at Macquarie Capital Securities (Philippines), said SM Investments’ 10- percent profit growth at P40.2 billion in the first semester is ahead of the brokerage firm’s forecast, while in line with available full- year consensus.

Lopez said key SM Investments businesses typically have a seasonally stronger second half.

Lopez noted the sequential improvement in earnings across all of SM Investments’ major businesses in retail, banking and property.

He said what was particularly interesting was the marked improvement in retail sales, reflective of consumption recovery.