Metro Retail posts lower profit in Q1
The company behind Metro Stores in the Philippines is ramping up online expansion and outlet upgrades for the remainder of 2024, as it tries to return to growth mode after its net income declined in the first quarter.
Based on its financial report, Metro Retail Stores Group Inc. reported that its profit fell by 16 percent to P50.3 million from January to March, from P60 million a year ago.
Metro Retail said its gross margins took a hit from rising inflation during the period, leading to the decline in consumer demand for general merchandise.
Sales went up by five percent to P8.7 billion, the highest recorded first quarter numbers of the company since it went public in 2015.
By business, Metro Retail said food retail increased by eight percent, as consumers allocated more budget for basic groceries.
However, sales of general merchandise dipped by three percent as buyers tightened their pockets for non-essential products. Inflation, or the general increase in commodity prices, hit 2.8 percent in January and jumped to 3.4 percent and 3.7 percent in February and March, respectively.
In spite of this, Metro Retail improved its business efficiency by cutting some fat in its spending, and this trimmed its expense-to-sales ratio to 20.4 percent in the first quarter.
The owner of 64 Metro Stores nationwide ended the quarter with a cash position of P3.2 billion, as it kept its debt-to-equity ratio at a sustainable level of 0.30 percent.
Metro Retail president and chief operating officer Manuel Alberto said the company will speed up its expansion efforts, both physical and online, to return to growth mode.
ÒLooking ahead, we are poised for growth with cautious optimism. Our strategic plans are geared toward calibrated expansion, enhancing our online presence and continuing to modernize stores,” Alberto said.
In January, the company opened a Metro Value Mart in Lapu-Lapu City to broaden its outlet network in Visayas. The company is keen on expanding its presence around the island, and it is putting up five supermarkets in Cebu and Leyte to support this goal.
Recently, Metro Retail inaugurated its 10-hectare Metro Distribution Center in Sta. Rosa Laguna to boost its logistics network, laying out the foundation as well for expansion projects in Luzon.
To date, the company manages a total of 64 branches across Luzon and Visayas through store formats Metro Supermarket, Metro Department Store, Super Metro Hypermarket and Metro Value Mart.