Metro Retail Stores Group Inc. (MRSGI) reported a sharp 73 percent decline in first-quarter net income to ₱13.4 million from ₱50.3 million year-on-year, as the company absorbed higher non-cash expenses tied to its ongoing expansion program.
While total sales rose marginally by 2 percent to ₱8.89 billion from ₱8.72 billion, MRSGI noted continued growth in both its food retail and general merchandise segments. Same-store sales, however, fell 1.7 percent, signaling underlying demand challenges.
Despite the profit decline, gross margin improved both in value and percentage terms. The company posted a blended gross margin of ₱1.90 billion, up 4.4 percent from the previous year, with gross margin as a percentage of sales increasing to 21.3 percent from 20.8 percent. The lift was attributed to a higher contribution from general merchandise and margin gains in food retail.
Operating expenses outpaced sales growth, rising to 22 percent of sales from 20 percent last year. MRSGI cited higher utility expenses from power rate hikes, particularly in the Visayas, and increased labor costs following government-mandated wage adjustments.
In a statement, MRSGI president and COO Joselito G. Orense reaffirmed the company’s strategic priorities: “Through 2025, MRSGI will continue to elevate customer experience, focus on optimizing our operations, and strategically expand our network to further strengthen our market position and deliver sustainable growth.”
As of April, MRSGI expanded its footprint to 72 stores with the opening of a new Metro Value Mart in Talisay City, Cebu, reinforcing its long-term growth ambitions despite near-term profitability pressures.
