Upson International Corp. Reported PHP 464.2 Million in Net Income in 2023, Down 13.7%

Leading IT retailer in the Philippines, Upson International Corp. (UPSON), declared P2.1 billion in gross profit, P10 billion in record revenues, P464.2 million in net income, and P0.16 in earnings per share for 2023. At a historic high of P10 billion, revenues increased 5.8% year-over-year, attributed primarily to the revenue growth of newly opened outlets that have been open for less than a year. Comparable sales from open locations went up by 1%.

Computers were the main product category that saw growth, with mid-range laptops leading the way. Positive contributions from printing and communication were also partially offset by declines in storage and component sales. Geographically, markets stayed mostly constant, with North Mindanao and the Visayas experiencing the strongest growth.

“2023 was a year of investment and transition, evolving from being privately held to becoming a public company” said Upson CEO Arlene Sy. “For the first time in our history, revenues surpassed P10 billion as we increasingly reap the benefits from our expanding footprint. This strong foundation is what we will build on this year. Our focus is on serving our customers better to unlock the full potential of the new stores and deliver sustainable and profitable growth.”
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With an increase of 8.9% to P7.9 billion in the cost of inventory sold, the gross margin dropped to 20.8% from 23% in 2022. Lower product margin rates from more frequent promotions, such as product bundling and price breaks, and revenue mix were the main causes of the margin contraction.

In order to support the company's strategic growth efforts, particularly those related to the expansion of the store and warehouse network, operating expenses increased by 9.5% to P1.7 billion. The majority of these increased costs were associated with staff, contracted and other services, depreciation and amortization, and lease payments. Operating expenses as a proportion of revenue increased a little from 16.2% to 16.7% in 2023.
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Lower gross margin and pre-opening costs contributed to the 13.7% decline in net income to P464.2 million. Other income, primarily from supplier promotional support such as volume-based rebates and sell-out incentive programs, as well as inventory price protection to drive demand and replacement cycles, helped offset the decline.

Upson had 232 stores at the end of 2023, having added 25 new locations, 12 of which were in the fourth quarter.
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Upson launched 12 tech brands, including AUKEY, ESR, Garmin, MOMAX, Verbatim, MONOCOZZI, and Cricut, to increase the range of products it offered. Additionally, it started to establish Apple corners at a few stores, giving customers more access to the brand. Upson's portfolio currently includes 115 tech businesses.

The board of directors of the company declared a cash dividend of P187.5 million, or P0.06 per share, based on the operating performance and management's estimate for the current year. This is the fourth year in a row that the company has paid cash dividends, up 36% from 2022.

​Upson International Corp. (PSE: UPSON) is the largest information technology retailer in the Philippines with over 200 stores and a track record of accessibility, availability, authenticity, and effective supply chain. Through trusted brands Octagon, Micro Valley, Gadget King, Octagon Mobile, and concept stores, we are committed to ensure that technology is within reach of everyone, everywhere in the country.