Wilcon Depot Inc. expects business to post a recovery in the latter part of the year, enough to manage a low single-digit growth on its same store sales and keep its bottom line “flattish.”
“Although we’re seeing growth, we’re very conservative in our estimate. We’re looking at the single digit (same store sales growth), probably in the low side because the first quarter was not really that good,” said Rosemarie Bosch-Ong, Wilcon senior executive vice president and chief operating officer in an interview with reporters early this week,
“We’re still experiencing the different headwinds that we’ve experienced in the past year. But looking at the coming months, we’re looking at a very good showing, especially towards the end of June,” Ong added.
Wilcon closed the first quarter of the year with a 27.5 percent drop in reported net income at P536 million from P740 million last year. Sales climbed 1.2 percent to P8.41 billion from P8.31 billion.
Its 2024 results, meanwhile, showed a decline of 27.4 percent in reported profit at P2.53 billion from P3.48 billion the prior year. Sales also fell 1.2 percent to P34.17 billion from P34.6 billion.
Ong said the company expects sales to start growing in the second half of 2025, after posting lower first quarter figures this year.
She noted the uptick in sales in May following the midterm elections and hopes the trend will continue in June until the rest of the year.
Ong said a further rate cut will boost sales.
Jean Alger, Wilcon vice president for investor relations, said earnings will likely be “flattish” this year given that the company is still recovering from the decline in the first quarter.
“We’re just looking at getting it even. But if sales will pick up some more, then we have just flattish to like a very low growth in the earnings if the impact can really be felt in the second quarter,” she said.
Alger said Wilcon is allocating P3.2 billion as capital expenditures this year, up 45 percent from P2.2 billion last year, to be used primarily for store openings, renovation and repairs, and buildup of the company’s information technology infrastructure.
Lorraine Belo-Cincochan, Wilcon chief executive officer and president, noted plans to open eight stores this year.
BPI Securities Inc. said in an investors’ note while the home improvement market is facing headwinds due to the overall property market challenges, Wilcon is still poised to benefit from home projects and upgrading of customers to quality home products, which could lift Wilcon’s same store sales growth (SSSG) by mid-single digit in the next two years.
The disinflationary environment resulting in lower interest rate may boost planned renovations of homes which, in turn, may pull Wilcon’s SSSG to grow by 1 percent this year and 6 percent next year, according to BPI Securities.
The potential improvement in vertical take-up as mortgage rates soften, uptick in building permit approvals, apart from the addition of eight new stores this year, are seen to drive the company’s topline growth to 5.7 percent between this year and until 2027.
BPI Securities also noted that while expansion-related expenses, including new leases and increased logistics costs, to support increased presence in the Visayas-Mindanao area are putting pressure on margins for the year, Wilcon’s operating margin is expected to recover to 10.3 percent and 10.7 percent over the next two years.
