Metro Retail Stores Group, Inc. Reported P618 Million in Net Income in 2023, Down 32.6%

Metro Retail Stores Group, Inc. (MRSGI) reported an aggregate net income of P618.0 million for the full year 2023 compared to P917.3 million in 2022, a 32.6% decrease. By excluding one-time gains like accounting adjustments on leases and insurance claims, the company's core net income for 2022 showed a decrease of only 18.4% when compared to the P757.3 million recurring profit of the previous year.

A high base in 2022 and persistent inflation pressures that impacted consumer spending did not stop MRSGI from maintaining its sales level in 2023, which increased by 0.4% to P38.3 billion from P38.1 billion the previous year. Comparable same-store sales growth finished flat, declining by 0.8%, mostly as a result of a reduction in the contribution from wholesale business.

Business-wise, general merchandise increased by 4.7%, propelled by clothing, electronics, appliances, and travel gear, maintaining its good momentum following significant growth in 2022. Retail sales of food decreased by 1.2% as a result of a decrease in bulk wholesale business from the previous year. With bulk transactions excluded, food retail sales increased by 6.2% annually.

The blended gross margin of MRSGI increased from 21.1% in 2022 to 21.6% in 2023. Rent rises, higher labor costs associated with opening new stores, and government-mandated minimum wage increases were the main causes of the 7.9% increase in operating expenses. As a result, the company's EBITDA dropped from P2.7 billion to P2.2 billion in 2023.

“Even with the challenged outturn, MRSGI reiterates its commitment of offering improved services to customers and better returns to stakeholders underpinned by its strategic initiatives to bolster growth and stability in 2024 and onwards,” said MRSGI President and COO Manuel Alberto.

With the opening of two additional Metro Supermarkets in Lapu-Lapu City, Cebu, and Alangalang, Leyte, as well as the launch of its neighborhood minimart Metro Value Mart in Gen. Trias, Cavite, the company's expansion continues. Concurrently, MRSGI began renovating its flagship locations to update the merchandising brand to better suit the changing needs of customers and enhance the stores' appearance and feel.

In 2023, MRSGI unveiled the updated Mareng Ems Program, which aims to deepen cooperation and offer a full range of services to companies, mainly those in the sari-sari and hospitality industries. Additionally, MRSGI redesigned the ShopMetro platform and released a mobile app under the same name, which was the main factor in its e-commerce business's double-digit growth.
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Furthermore, according to Alberto, the opening of the Metro Distribution Center in Sta. Rosa, Laguna, fortifies the company's logistics network in the first quarter of 2024 and establishes the groundwork for MRSGI's pipeline of expansion throughout Luzon in the upcoming years.
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The company's increased payment of cash dividends demonstrated its continued low debt and good liquidity position. Regular cash dividends of P194.9 million (or P0.06 per share) and special cash dividends of P324.8 million (or P0.10 per share) were recently announced by MRSGI.