WILCON Depot, Inc. logged a 22.8% increase in net income to P692 million in the fourth quarter last year, as the retailer’s gross profit margin improved with the higher contribution from its in-house brands.

“We delivered stronger quarter-on-quarter performance for the fourth quarter, which raised our net income for the year higher than initially expected,” Wilcon Depot President and Chief Executive Officer Lorraine Belo-Cincochan said in a statement on Thursday.

Net sales during the quarter grew 9.1% to P7.47 billion from P6.84 billion. The company said its depot-format stores made up for the majority or 97.2% of net sales.

Depot stores’ contribution grew 9.3% or P616 million and accounted for P7.26 billion as the opening of three new depots during the quarter brought new store sales. Comparable sales “remained approximately flat” with a 0.8% growth rate.

Home Essentials stores made up 1.9% or P130 million of the company’s total net sales. Sales from the segment went down 7.8% or P12 million year on year as comparable sales also declined 8%.

The company launched one new Home Essentials store in Central Luzon in the fourth quarter.

Meanwhile, its project sales went up 43.6% to P70 million.

Wilcon Depot’s gross profit improved 21.2%% in the fourth quarter to P2.84 billion from P2.35 billion. The company had a gross profit margin of 38.1%, improving 381 basis points year on year “as exclusive and in-house brands started its climb back up contributing 50.1% from the below 50% levels in the preceding three quarters and the 49.8% contribution for the same period in 2020.”

For 2021, the company posted a 76.8% income jump to P2.56 billion from P1.45 billion the previous year.

Wilcon Depot said this was “driven mainly by the increase in net sales and the expansion of gross profit margin, partly offset by the increase in operating expenses.”

The company’s net sales for the year increased 21.6% to P27.51 billion as comparable sales went up 12.1%. The company logged an improved sales performance after stores in Luzon remained open despite the surge in coronavirus disease 2019 (COVID-19) infections.

Sales from its depot stores made up for 97.4% or P26.79 billion of the company’s net sales, while Home Essentials stores accounted for 1.9% to P530 million.

Last year, Wilcon Depot launched 10 stores, nine of which are in depot format and one is a Home Essentials branch. The company spent P2.16 billion in 2021, which was used mainly for the construction of new stores and warehouses.

Due to its store expansion, the company’s operating expenses went up 16.8% to P7.2 billion.

“We are planning to add a minimum of eight stores in 2022 in line with our target to have 100 branches by the end of 2025,” Ms. Belo-Cincochan said.

“Should the COVID-19 situation continue to improve during the year, we are expecting private construction to normalize and our annual sales growth to stabilize and return to pre-pandemic trend,” she added.

Wilcon Depot shares at the stock exchange declined 1.41% or 40 centavos to close at P27.90 each. — Keren Concepcion G. Valmonte