Stock Commentary

AllHome Q1 profit skids 108% y/y thanks to fire and Omicron

Merkado Barkada
AllHome Q1 profit skids 108% y/y thanks to fire and Omicron

The Villar Family’s housewares and renovations retailer, AllHome [HOME 7.40] [link], posted a Q1/22 net loss of P27 million, down 108% from Q1/21 profit of P344 million, and  down 106% from its Q4/21 profit of P472 million.

HOME blamed the disappointing quarter on a “decline in foot traffic” that persisted through the first half of the quarter, which caused sales to drop 10% to P3.2 billion, and on fire damage losses coming from the January 8 fire that caused P303 million in losses due to damage to HOME’s Alabang location.

HOME said that the locations were insured against fire, and that its claim for recovery is still pending.

Despite the drop in net income, HOME’s gross margin actually increased from 31.9% in Q1/21 to 36.1% in Q1/22 due to lower spending on inventory thanks to HOME’s stockpiles that it built up through “advanced buys” in the previous quarters.


Not a great quarter for HOME, but the close correlation between profitability and foot traffic is one that we’ve seen play out over the past couple of years to the point where this result (or something similar) should basically be seen as an inevitable consequence of movement restrictions.

That’s not going to sit well with shareholders, who are down 30% from HOME’s 52-week high of P10.50/share back in October, and especially to IPO shareholder who are holding heavy bags that are down 36% from HOME’s IPO price of P11.50/share back in September of 2019.

As I’ve discussed before, I think HOME is a good business.

It receives a lot of build-in benefits from being a part of the Villar cluster of companies, and while it provides just as many benefits to the Villar cluster as it receives (HOME is a reliable anchor tenant to Villar-owned properties), the Villars have governed the operation and growth of this business well through the pandemic and all the challenges that have come along with it.

That said, it must be frustrating for shareholders to see this stock trading back at the ~P7.50-level, where it was for most of the May-through-August period last year.

On the optimistic side, maybe HOME can use this “low bar” as an easy jumping off point to gain some momentum into the peak season of the ‘ber months, and (fingers crossed) barring any new major fires or lockdowns caused by new variants, maybe HOME can dunk on this quarter in Q1/23. 



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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.




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