Robinsons Retail FY23 profit down 27.7% to P4.65-B

Robinsons Retail [RRHI 35.90, up 1.8%] [link] released guidance on its FY23 full-year results that showed a 27.7% drop in net income to P4.65 billion (from P6.44 billion). The Gokongwei Family’s retailer headlined the press release noting that its “Core Net Earnings Hit P5.6 billion”, which was a 0.6% increase over FY22’s P5.6 billion. Digging deeper into the operational side, RRHI said that its net sales increased 7.4% to P192 billion, with a 3.9% same-store sales growth that was mainly driven by the performance of its supermarkets and drugstores. RRHI blamed the dramatic drop in net income “mainly to the reversal of foreign exchange gains in 2022 to a loss in 2023”, to some issues related to the merger of Robinsons Bank and BPI [BPI 112.50, up 1.7%], and to “losses from start-up investments”. RRHI said that it was “optimistic” in its ability to “capture the expected recovery in consumer confidence” this year, and especially as inflation cools.

MB bottom-line: I always find it interesting when a company has a bad result because of non-core earnings to compare press releases with the previous year. 2022 RRHI was all “record earnings” and “core earnings acceleration” and “surge in profitability”, and they attributed this performance to their “category mix improvements and operating efficiencies.” Looking ahead to 2023, RRHI said that they’re going to continue to “take advantage of the economy’s return to normal” and “focus on improving store efficiency”. No mention of those forex gains. Did 2023 RRHI focus on store efficiency? Possibly. They managed to increase same-store sales by 3.9% in FY23 after managing to increase it by 11.8% in FY22, but they’re clearly slowing down. They referred to their FY23 core net income as “flattish”, but I feel like that’s stretching the applicability of “ish” a bit. FY23 core net income was up just 0.6%; ?5.587 billion in FY23 compared to ?5.554 billion in FY22. Seems pretty flat to me. 

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