MRSGI profit drops on higher opex

Gaisano-led Metro Retail Stores Group Inc. (MRSGI) posted a 36.5 percent drop in net income to P254.6 million in the first nine months of 2023 from the P400.7 million earned in the same period last year.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said profit decline is primarily due to higher operating expenses partially offset by the improvement in gross margin.

“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 MRSGI President and Chief Operating Officer Manuel C. Alberto.

He added that, “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.”

MRSGI posted a P117.7 million net income in the third quarter. The Company generated a 4.7 percent growth in net sales for the third 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, benefiting from back-to-school and increased travel activities.

Similarly, food retail expanded by 4.5 percent for the quarter mainly from higher grocery consumption and improved marketing and store initiatives.

For the nine-month period, food retail was slightly lower by 2.2 percent due to reduced wholesale transactions in 2023.

Total net sales over the nine months reached P26.5 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 was 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.

Last August, 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 engagement, consistent with the changing shopping needs and aspirations of the company’s customers.