Stock Commentary

Wilcon Q3 profit up 17% year-on-year, but down 3% quarter-on-quarter

Merkado Barkada
Wilcon Q3 profit up 17% year-on-year, but down 3% quarter-on-quarter

Wilcon's [WLCON 31.65 6.21%] Q3/21 profit of P622 million, up 17% from Q3/20 profit of P533 million, and down 3% from Q2/21 profit of P643 million. The home improvement and construction supplies retailer easily beat last year’s Q3 performance, but due to the movement restrictions applied as a result of the Delta variant, WLCON’s Q3 numbers under-performed its Q2 numbers by a small margin.

The company reported that it opened 6 new large format stores during the first 9 months of 2021; because of that expansion, WLCON also saw a 11.4% interest expense increase related to the leases for these new stores. The new stores accounted for 10.1% of the 27% total net sales increase y/y. WLCON said that it was looking forward to a stronger Q4, with hopes that easing restrictions will allow its customers to “finish or start their home improvement projects in time for the Christmas holidays”. 


As we’ve mentioned before, it’s full-steam ahead for anything in the real-estate ecosystem, provided the country isn’t forced to apply lockdown policies to suppress mortality associated with a COVID variant. Shareholders will like to see WLCON finish off its 9-store expansion this year (just 3 more to go), and continue margin-buffing through its “product mix” adjustments that had a positive impact on margins.

This is the same playbook for the Villar Family’s AllHome [HOME 10.60 6.00%], which also relies on expansion and in-house product mix to drive sales and margin growth. 



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