SSI 6-month net income slumped 40% as expenses surged

MANILA, Philippines — Retailer SSI Group Inc. saw its first-half net income fall by nearly 40 percent despite double-digit sales growth, as higher operating expenses and financing costs weighed on earnings.

The Tantoco-led company said on Monday it had booked a net income of P273.3 million in the first six months, down 39.5 percent from a year earlier.

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Net income margin consequently narrowed to 1.8 percent from 3.3 percent.

Operating income also fell to P528.7 million from P633.9 million, with the operating income margin easing to 3.5 percent from 4.7 percent.

The weaker bottom line came even as net sales increased by 12.3 percent to P15.1 billion amid macroeconomic and geopolitical pressures.

“This sustained top-line trajectory was driven by proactive customer engagement across retail channels, enhanced operational efficiencies following the enterprise resource planning implementations and highly targeted marketing initiatives,” the company said.

All brand categories posted higher sales. Personal care, food and home products led growth with a 38-percent increase to P2.5 billion.

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Footwear, accessories and luggage sales rose 35.9 percent to P1.4 billion, while casual wear grew 11.1 percent to P2.1 billion.

Luxury and bridge sales increased 6.8 percent to P4.3 billion, while fast fashion edged up 2.3 percent to P4.7 billion.

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However, total operating expenses climbed 15.5 percent to P6.2 billion.

Selling and distribution expenses increased by 13.5 percent to P4.9 billion due to higher store rental expenses, personnel costs, global marketing fees and transaction charges.

Still, second-quarter earnings showed improvement. Net income rose 44.4 percent to P120.4 million from P83.4 million a year ago, while operating income jumped 82.2 percent to P269.9 million.

SSI ended June with 623 stores nationwide and 99 brands. E-commerce generated P1.1 billion in sales, accounting for 7.4 percent of first-half sales. INQ