Expansion spending drags MRSGI earnings

Expansion-related costs pulled down the nine-month earnings of Gaisano-led Metro Retail Stores Group Inc. (MRSGI) despite a modest increase in sales.

In a stock exchange filing on Monday, the grocery chain said its net income in the January to September period had dipped by 19.6 percent to P204.7 million.

Net sales inched up by 4.2 percent to P27.6 billion, buoyed by a 5.8-percent climb in the food retail segment. Growth was tempered by a slight 1.2-percent decrease in general merchandise sales.

Rental income reached P277.1 million, up by 19.2 percent, due to gains from new tenants and higher rates paid by existing tenants.

Earnings before interest, taxes, depreciation and amortization were flat at P1.29 billion, according to MRSGI.

Operating expenses rose by 2.6 percent to P5.6 billion on “significant increases” in rent and personnel costs, MRSGI said in its financial report.

This also came as MRSGI opened five new branches in the last two months in the provinces of Samar, Leyte and Cebu, bringing the company’s network size to 69 stores.

“Moving into the final quarter, we remain focused on adapting to market conditions, finding new strategic opportunities, and realigning our priorities to ensure we end the year on a more positive note and to gain momentum for 2025,” MRSGI president and chief operating officer Manuel Alberto said in a statement.

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The company’s store formats include Metro Supermarket, Metro Department Store, Super Metro Hypermarket and Metro Value Mart, which are mostly in the Visayas.

MRSGI earlier opened its three-hectare Metro Distribution Center in Laguna province, paving the way for its five-year expansion plan in Luzon.

According to the company, the distribution center may be further expanded within the 10-hectare property it occupies.

It is currently capable of handling up to 25,000 cases daily for both inbound and outbound processes, translating to a maximum throughput of 1.5 million cases a month that can support both the Luzon and Visayas networks.