TANTOCO-LED SSI Group, Inc. posted a 58.49% decline in first-quarter (Q1) attributable net income even as sales rose by double digits, with higher operating expenses and weaker gross margins offsetting stronger consumer spending.
In its quarterly report released last week, the specialty retailer said attributable net income fell to P152.91 million for the January-to-March period from P368.39 million a year earlier.
Sales rose 11.4% to P7.64 billion from P6.86 billion, which the company attributed to efforts to increase customer traffic and strengthen brand engagement.
“The strong market presence of its brand portfolio, supported by marketing initiatives and in-store activities, contributed positively to consumer spending and overall sales performance,” SSI said.
Despite higher revenues, profitability weakened as gross margin for merchandise fell to 42.6% from 44.6% amid a more promotional retail environment.
Gross profit increased 6.4% to P3.25 billion during the quarter.
Operating expenses, however, climbed 15.8% to P2.98 billion due to a larger store footprint and inflationary pressures. Operating expenses accounted for 38.9% of revenues, up from 37.4% in the same quarter last year.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) declined 18.4% to P761 million from P932.5 million a year earlier.
SSI said sales performance across categories was mixed during the quarter.
Its “Others” category, which includes personal care, food, and home products, posted the strongest growth at 48.5%, while footwear, accessories, and luggage sales rose 32.7%.
Casual wear and fast fashion both grew 5.9%, while the luxury and bridge category declined 1.7% year on year.
E-commerce sales reached P565.3 million during the quarter, accounting for 7.4% of total sales.
Meanwhile, rental income rose 8.1% to P23.9 million, driven by leases of selected store and parking spaces at Central Square.
As of end-March, SSI operated 631 stores nationwide and carried 101 brands in its portfolio. During the quarter, the company opened five stores, reopened 12, and permanently closed 14. — Alexandria Grace C. Magno
