Retailer Metro Retail Stores Group Inc. of the Gaisano family reported a 1.2-percent decline in 2018 net income to P965.4 million from P977 million in 2017.
The company in a filing with the Philippine Stock Exchange attributed the weak financial results to the combined effects of the temporary closure of a supermarket and department store that were damaged by fire, the stoppage of a non-performing hypermarket and the rationalization of sales to resellers that were not profitable.
As a result, net sales in 2018 declined 5.6 percent to ₱33 billion from ₱35 billion in 2017.
The transaction count and average basket size fell 4.9 percent and 0.7 percent, respectively. However, year-on-year same-store-sales growth rose 5.1 percent in 2018.
Rental income in 2018 dropped 22 percent to ₱233.8 million from ₱299.9 million in 2017 due to a decrease in net leasable space resulting from the temporary closure of a supermarket and department store.
Cost of sales fell 6.5 percent to ₱25.65 million following an improvement in gross margin, as the decline in cost of sales was greater than the decrease in net sales.
“The margin improvement was driven by a well-executed enhancement plan that included among others, negotiation with suppliers and rationalization of unprofitable sales to resellers,” MRSGI said.
MRSGI at the end of 2018 had 53 department stores, hypermarkets and supermarkets nationwide with a total net selling space of 194,536 square meters. Twelve of the outlets are in Metro Manila, 12 in other parts of the Luzon and 29 in Visayas.
The retail company in February signed a joint venture agreement Samar to develop a mixed-use property in the province worth about P472.9 million.
Under the agreement, MRSGI will develop, construct and operate a department store with supermarket, a convention center, government center, transport terminal and a hotel
MRSGI, the largest department store and hypermarket operator in Visayas, in 2016 reported plans to spend P10 billion to double the retail footprint in the country over the next five years.
