MRSGI income down 36.5% on high OpEX

CEBU, Philippines —  High operating expenses (OpEX) pulled down the net income performance of Gaisano-led Metro Retail Stores Group Inc. (MRSGI) by 36.5 percent in the first nine months of 2023.

This decline however is partially offset by the improvement in gross margin bringing total net income to P254.6 million. In the same period in 2022, MRSGI posted a net income of P400.7 million.

MRSGI president and chief executive officer (CEO) Manuel Alberto expects a lift in the retail giant’s performance anticipating the strong consumer spending as the holiday season draws.

“Our last three quarterly results showed an improving trend quarter-on-quarter. Before the year concludes, we anticipate a lift in our performance as the holiday season draws in more robust consumer spending,” said Alberto.

“We are ready to serve early Christmas shoppers with a much wider selection of quality products at competitive prices and an easy and friendly shopping experience across our physical stores and online channels,” he added.

The publicly listed MRSGI posted a PhP117.7 million net income in the third quarter.

Meanwhile, the Cebu-grown company generated 4.7 percent growth in net sales for the quarter, supported by better sales from existing stores and incremental sales from newly opened stores.

By business, general merchandise increased by 4.8 percent for the quarter and 6.1 percent over nine months, benefitting from back-to-school and increased travel activities.

Likewise, food retail expanded by 4.5 percent for the quarter mainly from higher grocery consumption and improved marketing and store initiatives. For the nine months of 2023, food retail was slightly lower by 2.2 percent due to reduced wholesale transactions in 2023.

Total net sales over the nine months reached PhP26.5 billion, which was just a shade lower (0.04 percent) versus the prior year. Excluding bulk wholesale transactions, total net sales for the first nine months of 2023 increased by 5.2 percent year-on-year. Blended same-store sales were at about the same level (1.2 percent lower) as a year ago.

Gross margin improved across businesses which resulted in a higher blended gross margin at 21.7 percent for the first nine months of 2023 from 20.6 percent for the same period last year.

However, this was offset by the 9.6 percent increase in operating expenses mainly due to the rise in manpower and rent expenses.

The Company’s balance sheet remained solid, with a strong cash level of PhP3.4 billion, while the bank debt-to-equity ratio was low at 0.32.

In August this year, MRSGI launched two new supermarkets in Lapu-Lapu City, Cebu, and Gen. Trias, Cavite. With the closure of two underperforming stores earlier this year, the net store count currently stands at 62.

In the coming months, the company will continue to pursue its acquisition and expansion plans, especially in the Visayas. Alongside this, MRSGI will refresh its merchandising brand and online engagements, consistent with the changing shopping needs and aspirations of Filipino consumers.