SSI income falls 47.5% on higher costs, weak demand
TANTOCO-LED SSI Group, Inc. reported a 47.5% decline in its 2025 attributable net income to P1.32 billion from P2.51 billion a year earlier, weighed down by operational disruptions, weaker consumer demand, and higher expenses.
Revenue growth was modest during the period, with net sales rising 2.9% to P30.8 billion from P29.9 billion in 2024, the company said in its annual report released on Thursday.
The company said operational issues related to its systems transition affected performance for most of the year.
“The group’s sales performance during the first nine months of the year was negatively affected by implementation issues related to the Group’s transition to SAP and ETP Enterprise Resource Planning Systems. These issues caused delays in warehouse-to-store replenishments,” SSI said. SAP and ETP Enterprise Resource Planning systems are integrated software platforms used to manage core business processes such as inventory, logistics, and store operations.
Despite resolving these issues later in the year, demand remained soft.
“And while these issues were resolved by 4Q (fourth quarter) 2025, sales during the 4Q reflected generally weak consumer demand during the period,” it said.
Margins also came under pressure due to discounting.
“Lower gross margins during 4Q 2025 reflected additional discounting necessary during a period of weak consumer demand,” the company said.
At the same time, operating expenses increased.
“Operating expenses for the year ended Dec. 31, 2025 amounted to P12.0 billion, an increase of 14.0% as compared to 2024,” SSI said.
Higher costs were driven by increased depreciation linked to store renovations and new store openings, as well as higher personnel, rental, and other operating expenses, according to the report.
As a result, operating income fell to P1.87 billion from P3.23 billion in 2024, while earnings before interest, taxes, depreciation, and amortization (EBITDA) declined 24.8% to P4 billion.
For the fourth quarter, net income dropped 45.7% to P677 million from P1.2 billion a year earlier.
SSI said economic conditions and consumer spending trends remain key risks to its performance.
“A worsening of the economy may negatively affect consumer purchases from SSI’s brands and could have a material adverse effect on its business, financial condition and operating results,” it said.
The company also noted seasonal patterns in its business.
“Sales generally slow down in the first and third quarters of the year, and start to pick up in the second and last quarters…” it said.
SSI Group, Inc. is a specialty retailer that manages and operates international lifestyle brands across categories such as luxury and bridge, casual wear, fast fashion, footwear, accessories, and luggage through its nationwide store network.
The company ended 2025 with 628 stores and 102 brands nationwide. In the fourth quarter, SSI opened 43 stores and closed 21.
On Thursday, shares of SSI Group rose 1.63% to P2.49 apiece. — Alexandria Grace C. Magno
