Good afternoon, everyone. Thank you for joining us today for our first quarter 2024 earnings conference call. Joining us are Ms. Lorraine Belo-Cincochan, our President and CEO, and Ms. Rosemarie Bosch-Ong, our SEVP and COO. Lorraine will give a brief report on Wilcon's first quarter performance, after which we will open the call for your questions. Before I turn over the call to Lorraine, may I just remind everyone that this call will contain forward-looking statements, and that these statements, made or implied, are subject to risks and uncertainties that may cause actual results to differ materially from these statements. The notice regarding forward-looking statements is also included in the press release and in the materials. Let me now turn you over to Lorraine.
Thank you, Jean. Good afternoon, everyone. Thank you for joining us today for our first quarter 2024 earnings conference call. For the first quarter, our net sales for the quarter reached PHP 8.31 billion in sales, down 2.5%. Comparable sales slid 7.3%. Gross profit margin rate at 39.9%. PHP 740 million net income after tax, which is down 23%. I think I lost my slides. Hold on a minute. Okay, let's go to the next slide.
Sorry about that.
All right. Again, our net sales for the quarter reached PHP 8.31 billion in sales, down 2.5%. Comparable sales slid 7.3%. Gross profit margin rate at 39.9%. PHP 740 million net income after tax, down 23%, and EBITDA margin at 15.6%, and EBIT margin was at 11.8%.
Two DIWs or Do It Wilcon were opened during the quarter, one in Luzon and another in Mindanao, and one depot in Mindanao. We closed the quarter with 93 stores. For total sales breakdown for the quarter, the depot format stores comprised 95.9% of total sales with PHP 7.97 billion. DIWs accounted for 2.8% with sales of PHP 232 million, and project sales at PHP 105 million accounted for the remaining 1.3% total of net sales. The depot format store sales dipped 4% or by PHP 335 million, while the DIW format stores, because of the new additions, recorded a 37.2% sales growth year-on-year, despite a same-store sales decline of 10.9%. Metro Manila stores, both depots and DIWs, accounted mainly for the slowdown in sales as these branches had the highest base, recording the highest SSSG for the same period in 2023.
Product sales' increasing trend in 2023 carried over to the first quarter of 2024, growing by 108% year-on-year. Product categories performing better than average were furniture, furnishing and houseware, building materials, electrical and lighting, paints, and hardware and tools. Tiles, plumbing, and sanitary wares and appliances, in contrast, did worse than average. For comparable sales, they slid 7.3%, mostly because of the substantial drop in March sales with the Easter holiday season shifting to March this year from April last year. Metro Manila stores had the highest same-store sales drop, followed by the Luzon stores. March was also our highest grossing month last year. The depot's SSSG fell 7.9%. The DIWs decreased by 10.9%, mostly contributed by the converted Metro Manila home essential branches. Comparable ticket size was flattish at below 1% growth, while transaction count decreased by 7.6%.
Our gross profit margin rate expanded to 39.9% for the quarter, owing to the increased contribution to total sales of in-house and exclusive brands from 50.4% same period last year to 52.6%. However, this was not enough to cover the drop in sales, hence gross profit still decreased by 1.3% or PHP 43 million to PHP 3.32 billion. Operating expenses, including the lease-related interest expense, rose by 6.9% or PHP 158 million year-on-year to amount to PHP 2.472 billion at the close of the quarter. The increase is mainly attributable to expansion-related expenses, specifically trucking and depreciation. Operating other income of PHP 129 million was 41% lower than first quarter 2023, as there was a one-off rebate from supplier last year generated from a promotional campaign that ran the whole quarter. Income tax expense decreased by 23% to PHP 245 million due to the lower taxable income.
Hence, net income decreased to PHP 740 million for the quarter. A snapshot of our balance sheet, because of the lower sales year-on-year, profitability and efficiency metrics likewise dipped, but we are looking forward to turning this around as we continue to work towards improving our performance. We are still self-funding our store network expansion. The company's liabilities consist mostly of trade payables and lease liabilities recognized under IFRS 16 guidelines. We opened three branches this first quarter, and another two to three are set to be opened in the second quarter. Total CapEx for the quarter reached PHP 845 million. Margins dipped for the quarter compared to the full year 2023 margins, but are still better than pre-pandemic margins. We consistently distributed cash dividends since listing. Our most recent dividend declaration was on March 20th, 2024 for PHP 0.26 per share.
Our key growth strategies remain for our store network expansion plans. We will open at least 10 branches this year. We will continue to develop products in other categories for in-house brands to increase their contribution and diversify further our product portfolio. We are continuously improving our physical and online store layout and features and other customer experience enhancements, and continued marketing efforts to further strengthen and increase brand awareness and visibility. Thank you, and I'll turn you over back to Jean for Q&A.
Thank you, Lorraine. We're now opening the call for your questions. Just click the raise hand button or type your questions in the chat box. Yes, John.
Hey, thanks for the opportunity. I have just three questions. First is, would you be able to give out the same store sales growth if we combine March and April? Because I understand it was -3% in Jan and Feb, but I wonder what that number is for March to April.
We haven't computed, but I would suppose, probably even-
Yeah, if you combine. You can always-
Do we have an estimate for ano-
Yeah.
I think year to date.
For April to May.
Year to date. Yeah.
Yeah. It will even out because whatever is negative of March is the positive of April. It will even out, actually. Because March last year was that Holy Week, no? The driver of the sales really on the number of days. Plus, March last year, as Lorraine mentioned, it was the highest in terms of sales, no? It was the highest month that generated more sales, no? It will offset, no?
Yeah, I think
From the estimate that we have for April, because April
I think year to date
Very promising. Yeah
I think year to date, we're in the Jan-Feb level, around that.
Yeah. Jan-Feb.
Year to date.
If we see more improvements continue in May, definitely it will be positive. Yeah. It should be better. Yeah.
Okay, thanks. Actually, that was my follow-up question. I remember during our last call, you mentioned some of your customers have already been picking up with their intentions to spend. I guess, again, the question is, have you seen a further pickup in that for May, June, and probably July? As in maybe an overview of your sense of where the construction is starting to pick up, et cetera.
Well, April seems very promising, after the long holidays during the month of March.
And the first five days of the month.
Hopefully it will continue.
Yeah. Five days of May.
First five days of May is. Yeah. Remember we mentioned that if it fall on a weekend, it's not going to be a good holiday for us.
If it's the holiday, yeah.
However, the holiday was in the mid-week, no? It's Wednesday, so I guess, yeah.
Yeah.
Hopefully it will continue barring any unforeseen events again, right?
I don't know if we're kinda sweeping the whatever the term is. But on May 1, the parking here in our head office, it was so full that up to the employees' parking, and it was on holiday, right? No employee cars were$ there.
Yeah.
They had to open up the employees' parking for the customers. For the first time since 2022, it has happened.
Yes.
Hopefully that's a sign that our customers are back to spending.
Okay, thanks.
on home improvement.
Thanks. Last follow-up to that. If talking to your suppliers and your customers, because you are sensing a pickup in sales, what were the reasons that they have cited to actually induce more spending? Because interest rates and inflation I guess haven't from the last time we spoke. So have they just adapted to prices that have reached these levels and now are more willing to spend, or are there other reasons for that supposed pickup?
We don't ask why are you spend.
Okay. Again, the sample size may not be a very good basis yet to say that they're really full on, that this has been. Just based on the sample size, the most immediate or logical conclusion that we can just make is that it's really the time for them to renovate or fix their homes. Because we said early on that in 2022, everyone, even those who did not need to, fixed their homes. That's why it's an advanced spending. But now, 2024, perhaps a good part of our market really, they now really have to fix some things in their homes, or they really have projects that they have to continue or have to start working on for whatever reason. Again.
Yeah. Jean, if I may share also, earlier I was sitting with the operations team, and we're trying to figure what are the contribution now of our loyalty customers to our sales. So we got the numbers for April, and it seems that we're going back to pre-pandemic levels, because remember during 2019, the contribution of our loyalty members is about almost 50% of our sales.
48%. Yeah. 48%, 49%. Yeah.
48%. Now it has gone back to 47%, so meaning we're seeing normalcy already, because during pandemic it's less than that. It's about 20% + only. So mainly those are impulse buy or pent-up demand, wherein it's not really planned. Then with the new program that we introduced, the ABCDE program that we introduced, we're seeing more interested contractors or ABCDE, architect, builders, and professionals. They're more interested now to enroll. So almost every day we're seeing enrollment. To date, we have officially enrolled more than 3,000, almost 4,000 members already of the loyalty. From what we see also, Jean, I shared with you.
Of the ABCDE. Yeah.
The ABCDE contribution now is increasing. It is even bigger than the contribution of our project or institutional sales. Earlier, Lorie mentioned that the contribution of institution is about 1.3%, right? But now we are seeing even double than that, the contribution of the ABCDE. So there is that sense of normalcy already. Hopefully, it will really normalize. Because we have mentioned that what we have experienced in the past two, three years, it is all really abnormal or pent-up sales. But now,
Or advanced. Yeah.
We are looking at. Yeah. Or advanced sales. Instead of them doing it on a later date or. Because since they are not doing anything, they want to do it at that time, maybe because of the timing. What we saw in 2023 is that they are in a pause because they have other priorities, but now it is going back to normal. Hopefully what we have mentioned, the April and the first four days of May, would continue. It will sustain the trend.
Okay. Thank you, Ms. Rose. Thank you, Jean. I will go back to the queue.
Thank you.
Yes, Sangam.
Yeah. Hi, thank you for the opportunity. Yeah, just wanted to understand, after a long time now we are hearing a little bit positive feelers coming in, especially from April and May, in terms of customers coming back and buying. Is there a significant pickup in the average ticket size that you are seeing in these customers that were coming in in April and May, or is it more increased footfalls that is getting converted? How should you attribute this given that we had a significant lull last year when things were not towards the second half especially. So after this gap when customers are coming back, is there a pent-up which is resulting into higher ticket sizes per transaction, or is it like it is just the beginning where the transactions are just picking up?
Comparable traffic count, it is still at the negative. We continue to add stores. I think the contribution of the new stores have, in terms of footfall or traffic count. I guess the sales is really more coming from the transaction amount or the volume rather than the number of footfall. Consumers have changed their behavior, I guess because of the online with the enhancements that we are doing with our website. The customers before coming to the stores, they would visit first and browse in our online. It is really complementing each other. Unlike before, they would hop from one store to another store, or they would keep on coming back to our store before they make a decision. Foot traffic has not gone back 2019 level, but we see improvements in the transaction count and even the transaction amount.
Got it. Given this new development that you are seeing in April and sustaining in the initial part of May now, is there a change in the way you would like to guide for the full year in terms of your growth, et cetera? We have been quite steady in terms of store expansion, and this is a fresh development that is coming in.
Yeah, I think we still stick to the guidance that it is for SSG or comparable sales. It is going to be, I guess, mid-single. For TSG or total sales growth would be in the mid-teens, but low teens. Mid low teens.
Low teens. Double mid lows. It is double-
I'm-
digit for the total sales growth.
Double digits, but yeah.
Low teens. Yes.
Up to low teens, yeah.
And low single for-
Mid.
Yeah, low. Okay, we got-
Not single, lows
low single.
Low single, yeah.
We don't want to pull the trigger too early.
Yeah, I got you.
You know?
I got your point. I got it.
We might spook the
Yeah, got it. Got it.
Also-
Never jinx it.
and also-
Yeah.
You know the Chinese, they have all these beliefs. We might spook the
No, true.
With the-
So, just as an extension from what John was asking earlier, right? Now, given the current-
Yeah. Yes.
scenario of higher rates for a longer time, do you think that now customers are kind of digesting the higher rates and saying, "Okay, now this is the new norm." And now they are recalibrating their overall demand scenario, and that's how the budgets, et cetera, are now getting recalibrated. And now-
Yeah
the spends are happening. Is that an observation that you can say is accurate?
Yeah, that's a possibility that our market has adjusted to the inflation, the high interest rates and life must go on, and are going ahead with whatever the plans they have of renovating or even building homes. Right?
Got it. So with these increased ticket sizes, and to achieve this kind of outlook
Yeah. Okay. The thing is, for ticket size. Because we've been expanding outside of Metro Manila. So every time we expand outside of Metro Manila, the average ticket size gets pulled up because, again, that's why just as a proxy and just as a broad assumption, that outside Metro Manila, there are more new builds or more really major renovations. Whereas here in Metro Manila, with a mature market and most of the developments are high-rise, then it's just really small basket sizes when they buy here. So, it's really that factor, because since last year we haven't increased prices, and so it's really that that drives the increase in ticket size. It's more on where we are expanding. So wherever we are expand
So like you-
Most of the time, where we are expanding, at least in the, what, 10, 20-km radius, we have a zero base there. The impact really is more substantial in terms of pulling up the ticket size.
But, given that the fixed costs other than outside Metro Manila would be much lower, shouldn't that result in a better margin profile and better profitability as we move ahead? Because operating leverage should also start coming in, right, from these stores?
I cannot really
Yeah.
It's very difficult, really, to conclude because if we group it by age, if we group our stores by age, we group by area, really, the highest and the lowest are sometimes really so far apart, right? If you get the average, it doesn't really tell you anything. It's like your head is in the oven, your feet are in the freezer, but overall you're feeling all right. It's kind of like that for many of our, or for some of our stores. It's actually just really Metro Manila that it's more homogenous. But for the other areas, the behavior is really quite diverse.
That's why when you ask, we always say, "Oh, it depends," because, yeah, we have averages, but it doesn't really. If we have solutions, just basing it on average, it doesn't really work on it if we have to be specific on a per store basis. Yeah, we've always thought that depots would have the better margins. But so far, of the four standalone, oh my God, we have the four standalone DIWs that we've opened so far, three of these DIWs, despite these stores being new ones, they have higher operating margins than the average depot.
Got it.
Yeah. It's like that, and these areas also where we have these DIWs, we also have other branches nearby. It's not also because it's just that one branch there.
Is it resulting in cannibalization to other branches nearby?
Yes. Definitely, we've experienced cannibalization in certain areas. But the market warrants us to add a branch in the area because otherwise, a competitor would move in. So rather us than them. That's the philosophy that we're following.
Got it. Thank you. All the best. I'll come back in the queue.
Thank you. Yes.
Yes.
Hep?
Hep.
How do I pronounce?
Heib?
Yes, TRG. Mr. TRG.
Yes. Thank you. Yes, thanks for taking my questions. My first question is, would you consider doing capital raise, just to pay down some of the debts and just to make the balance sheet a little bit cleaner?
We don't have any bank debts. The debts that are in our books are just the trade payables, and those are the lease liabilities that we had to. Those are "artificial debt," when we shifted to IFRS 16 in recognizing leases.
Got it.
We do not really have. No, we do not have. Not really.
I see. Yes.
We do not have bank debts.
I got it. Okay. In terms of inventory level, can you remind us, what is the current inventory days, and do you feel this is optimal or not? What would be the optimal level?
No, it's not optimal. I don't want to say, you might get scared. The first quarter, 2023 was like eight months inventory days, and for the first quarter, of course, because of the lower sales, it's higher, but should be temporary. Hopefully, in the second quarter, that would go back to the eight-month level. So it's nine months in the first quarter. Our ideal for us is six months, and we were at six months until 2021, when we had to address the supply chain challenges of that time.
Mm-hmm. So can you-
Nowadays, there are other considerations. That's why it's taking us time, and it is also not that easy to bring down together with the softness of the demand and softness of the market. There are other considerations and other buying strategies that we are tweaking to take advantage of certain conditions in the market. Our principals, having been here for 47 years, they kind of know when to take advantage of some things. I really cannot disclose any detail because it's very strategic. My bosses are here, so why we're doing what we're doing.
Right. Should we think eight months is going to be the new norm now versus six months before?
Yeah, it has been since, I think, end of 2021. It has been that. In 2022, I think it improved to seven months.
Okay
It went back to if demand would pick up, and I think we'll slowly get our inventory days down. But we are willing, because our GP margin is at 40%, right? 39.9%. If we round it off, it's 40%, right? We think we have room, just so we could balance it out with a more manageable or less headachy inventory days. We'll see. We're trying out things, pushing this, implementing this and that, just finding right balance. We normally really don't do anything so drastic, so any result that you may see would come out gradually.
Mm-hmm. In terms of store portfolio, do you have non-performing stores now and you're looking?
Oh, yeah.
for close on how many of them?
Of course. Well, the old Home Essentials, which are really the old branches, they've always been on the brink or just below on the brink, barely making it, or like now, the demand is soft, really under. We've in fact already closed two last year. Because these are old stores with loyal following, so we're just really making the operations more efficient and just so we could keep those stores open.
Mm-hmm. How about for the Depot format?
For the depots, we would have maybe less than a handful.
But again, because WDI already spent on the building, it is still tracking, of course, a payout, say, of six, seven years instead of the five. Yeah, it is going to be more expensive, and then that to continue with it, and the area anyway is. So what we do operationally, we know we cut down on manpower because, of course, we know already that the foot traffic is only up to that number and all that. So we are doing that to minimize their operating expenses. So we do that. We tweak, even if we have a standard for a certain size of a store, we have that. So we tweak, of course, to be more efficient or to save some costs.
Sorry, can you quantify for the depot formats and how many stores are struggling or making losses at the moment?
I do not have it off the top of my head. Maybe you can email me, and I will.
Mm-hmm. Okay. Sure. Okay, then my last question is on the SSSG. You mentioned there seems to be some improvements in April and then month to date. Do you feel this is more specific to the home improvements segments industry only, or you feel it more broad by general consumption and economy?
Ms. Rose.
Yeah. I think, yeah, we're going back to normal even the malls now are-
By the way, it's your last question
we're seeing-
Let's give chance to others.
Yeah.
Yes.
Okay, we're seeing improvement in the economy because even the malls now, spending for other sectors also. For example, during weekends, if you go to the malls now, people starting to go out already and spend money. Yeah, and I guess also people now stopped traveling unlike last year. They're back to normal already. Yeah. I think all sectors are also-- Especially tourism, no? I've got reports from some of the stores that some of those customers that have gone back are those building resort in a second homes. So yeah.
Great. Okay, thank you so much.
Yes, Joyce.
Joyce.
Sorry, I kind of missed the earlier part of the earnings. I'm not sure if this was discussed already. Just want to ask for any comment, ma'am, that you can share on the recent fire that happened this week. Thanks.
Oh, yeah, the fire in Baliwag. It's very unfortunate, but however, we're still lucky because we didn't have any casualty. It was only damage to our inventory and of course the building. But as of this moment, we cannot disclose yet any further information except that or any amount, because it's still under investigation. It has reached the national level already, so pending the investigation, then we'll be able to provide you detailed information. But definitely we will, how would you say? We will report some losses. But as far as the contribution of that store to the revenue, of course, it's a loss, but it's not really that significant because we have four stores in Bulacan, including that one. The three stores are compensating for whatever is lost due to the fire.
From what I heard also from operations, some of those stores within the periphery, like for example, the Gapan stores, those customers coming from-
In Nueva Ecija.
Yeah, Gapan.
Farther north.
Those coming from San Ildefonso, they are being directed to. We have seen some improvements in the sales of our Guiguinto and our Calumpit branch as well. Yeah. Then we filled that, Jean, because we have salespeople there who are stationary, so we assigned them to go on field and visit their customers. So we included them as part of the field customer experts, yeah.
Thank you.
But definitely we will rebuild, Joyce. We will rebuild once we get all the clearances, once we're allowed to move. Because even the mayor is anticipating us to rebuild because we're number three, we're top three taxpayer in Baliwag. We were consistently for the past. We've been there for 14 years now. So next to SM Prime Holdings and The SM Store. So we're number three.
Yes, Denise?
Hi, guys. Could I ask what your expectations are on margins for the second quarter? Are we likely to still see the impact of negative operating leverage since we are incurring additional expenses from the new stores? Or do you see maybe potential improvement in SSSG kind of offsetting those incremental costs? Thank you.
Definitely, we are positive SSG should be sufficient to cover any expenses due to expansion or the new stores, as shown in the previous years, except in 2023. Yeah, positive SSG is really key. Yes to your question. That's why we are not changing our guidance that we can still do a positive SSG for the year.
Okay. Thanks, Jean. Also, just a quick question maybe on current consumer trends. Are there any favorable trends that you're seeing in the second quarter, particularly on the end consumer side and maybe on construction activities as well? I think in particular, what I'd like to ask about is maybe any positive or negative impacts from El Niño currently. Maybe we could be seeing some improvement in demand for appliances or, on the other hand, maybe any delays to construction activities because of the hot weather. Any insights would be great. Thank you.
Definitely, there's impact on construction. In fact, as we've consulted some of our customers that are mostly contractors and what, they're saying that they changed the shift in the working hours instead of the usual, let's say 8:00 A.M. to 5:00 P.M. What they did, morning they made it earlier 6:00 A.M. to, let's say up to 11:00 A.M., and then 2:00 P.M. up to 6:00 P.M. So they've adjusted also. Because once you've started, you have to continue. What they did is that they made some adjustments on the working hours. As far as the behavior is concerned, as I've mentioned, I think they do research first before they go to the store, through browsing online. Also we've seen the interest of our professional and even non-pro, those who are builders and contractors. They're quite interested in the program that we just recently introduced, the MyWilcon ABCDE+.
It's because it's tied with the loyalty. So they're interested with the concessions and also with whatever advantage they will get when they enroll in the loyalty program or the ABCDE program with loyalty.
Okay. Thanks again.
Thank you.
Any more questions?
Nadine.
Yes, Nadine.
Yeah. Hi. Thanks for the opportunity. Just wanted to get more color on SSG divergence between the regions. Understand that Metro Manila was up last year, but how are the SSG per region as of year to date 2024?
I think SSG per all are negative. All are negative, right?
For the first quarter.
Hold on. For the first quarter, SS no. Ay, mali. Sorry.
I think South Luzon and Mindanao are both positive. All the rest of the regions are negative SSG-wise. It is only South Luzon and Mindanao that has some improv-- Is it Mindanao or Visayas, Jean? But it is one of them. South Luzon is positive.
Yeah, Mindanao.
Yeah. Mindanao and South Luzon. The rest are all negative, especially Metro Manila, Central Luzon, and even North Luzon.
Hold on.
They're all negative. Yeah.
No, all are negative, ma'am. Sorry.
Wala pang positive. Negative. Yeah.
Yeah. They're all negative.
SSG?
Yeah. SSG. You are talking about total sales growth. SSG, all are negative with Metro Manila having the highest.
Yes. Highest negative. Mm-hmm.
Yeah.
Highest negative.
Yeah, just a follow-up to that in terms of sales growth.
It's really because of March. Jan, Feb, definitely some areas were positive.
In terms of sales growth, we saw positive for South Luzon and Mindanao, is that correct?
Yeah, for TSG. TSG. Yeah.
Yeah.
That's for the first-
Because our TSG company-wide is negative, right? 2.5%. But we have some areas are positive, so Mindanao and South Luzon. Right.
Yeah, Mindanao, South Luzon.
As of April and May, we are already seeing positive SSG for Metro Manila or we are still seeing-
Yeah, because for April, we are already high single positive.
Yeah.
Definitely.
Yeah, Metro Manila is positive already.
Okay, thanks for that. Just another question on margins. First, on gross profit margins, we saw a record contribution from the private label and exclusive brands. Do you think that the 52% contribution can be sustained into 2024, and in turn, you guys can keep the GPM at above the 39% level?
It can be sustained, but we do not want. We miss the local sale, the non-exclusive sales. I mean, they have their own following. Yeah, definitely, it can be sustained. Because January, we were 54%. It just got pulled back to 52.6% because of March, because there was no construction. Our in-house brands, really majority are in our core products, the hard products. So that pulled down the quarter contribution. But really, in January, it got to almost or just hit the 54% mark. But the sales are so low. So yeah.
Thanks, Jean. Are there specific initiatives being done to push the non-exclusive brands?
Well, on our part, we're just doing the normal. Any initiative, it's really initiated-
Coming from the suppliers.
Yeah. Initiated by the supplier.
Thank you. Last question, in terms of OpEx, do you think that the OpEx-to-sales ratio of close to 28% can we expect this to be lower for the rest of the year as we improve sales? Or is this the new normal?
Yeah. If sales will improve, definitely, because most of our OpEx are fixed. It's not really variable. So yes, higher sales should solve that.
That's all for me. Thank you.
All right. Rainier, before I get to you, I'm just going to read out the question from Carissa. Can you elaborate on the new ABCDE program that you mentioned earlier that is gaining traction among customers? It's a sub-loyalty program that we're offering to ABCDE, architects, builders, contractors, designers, and engineers. You may recall, before when you asked us about how much percent are the contractors, how much are pure retail, we're saying we treat everyone as retail. But with this program, we are now having a special treatment for the professionals and for contractors. So we are asking them to sign up. They just present their credentials that they're professionals or their business permits, and we will grant them membership, and they will be entitled to special privileges, discounts, and first dibs on any promotion. Pretty much like a loyalty, but they have a subunit.
It's system-based, also based on our loyalty system, and we just carved out a subcategory for them. That's the idea, to encourage them to buy from us, because we felt that during this pandemic and during the slowdown and when everybody was downtrading, it was them that, because they have to protect their margins, they have businesses to run, that really went somewhere else, most probably to get cheaper options. That's the program. What is the update on the Baliwag store? Do we expect it to reopen? I think, we're just doing, Ms. Rose, right?
Yeah.
I think Ms. Rose explained it earlier.
We'll reopen.
Is it me or is-
Half of the store. Are you on mute?
No, you are breaking up.
Half of the store, we can rebuild. I am sorry. Yeah, half of the store, we can rebuild. It is only the portion of the DIW or those where the paint section are that are heavily damaged. But probably once we get the clearance, we can start moving in and start rebuilding. Yeah, maybe give us a week. No, two to three weeks. Probably release already the clearance to us so that we can start going inside, and even adjuster also ensure they can enter.
Okay. Rainier?
Yeah.
Sorry, Rainier. How much would the closure impact Wilcon's sales and profit? Last year, the sales of Baliwag accounted for around 1.43%, around that.
Yeah. 1 point-
Yeah. So-
As I mentioned, Jean, the other stores-
The other stores, yes
are compensating. The other stores are compensating for the loss. We saw some improvements on the sales based on the daily average of these sales within the periphery. They are improving. And then as I have mentioned also, we are sending them out to the field for them to get more leads.
Okay, Rainier, sorry. Your turn.
Thank you. Thank you for the opportunity and for the presentation. Just two questions. I think we have heard, in this case , from your competitors as well, and they are attributing a part of their sales weakness as well is due to, I guess, some of the older inventories even coming from the pandemic. Can the same be said for Wilcon, that you still have some remaining inventory that are pretty much outdated now at this point?
There's no obsolescence in construction. For the products that we sell, for example, tiles. The different themes are timeless, like Mediterranean, whatever you call it, or contemporary. So yeah, there are old inventories, but there's no obsolescence, in terms of trend. It doesn't go out of fashion, I would say. I don't know what. Probably they're referring to broken quantities. Meaning they cannot sell it because, for example, for tiles, you cannot sell it if there's no more matching, let's say, plain that will match.
Yeah
coordinates. But for us, I guess, what we do, even if you do some promotions, it will not move out unless there's a demand for it, right?
Yeah. I cannot see.
Obsolescence, yeah.
I cannot see the connection. If they have old stock, then they are not selling.
For example, for sanitary wares. Unless it is very old. The trend now is that we have smart water closet. But the smart water closets that we have, they do not get out of style. They do not get out of fashion. We can still sell them even one to two, three years down. Except when, of course, there is new technology. It is not like cellphone and entertainment like television. It gets out of style because there are new trends or new, what do you call this? They always improvise the features. So we are not selling like your cellphones, but basically even the appliances that we sell, those that are installed or you call them built-in appliances, they do not go out of fashion. What would hurt the inventory is that if there are, like what I have mentioned, broken quantities.
Your inventory, let us say, is scattered all over, let us say, in 70 stores, and they have different code and shade. But we have a way, we have a strategy on how to consolidate them, because each area, each cluster will support each other. So what we do is we move out within the cluster, those, let us say, broken, we call it, Jean, broken quantities or yeah.
Yeah. Broken quantities and MCAS.
MCAS on that.
MCAS mix.
Yeah. MCAS. That's MCAS.
Yeah.
What we do, we give price off just to be able to move it out. Hopefully with the ABCDE program, as Jean said, aside from the discount concession that we give, first dip on whatever promotions or price off or let's say pallet sales. We sell by pallet. We give more discounts when they buy in pallets. Yeah.
Okay. Thank you for the. Just last up, I'd like to clarify.
I'm sorry?
You're breaking up.
You're breaking up. We can't understand.
Hi, Ms. Jean. Sorry. Am I clear now?
Yes.
I'd just like to clarify the SSG for April, for the consolidated or basically for total sales. For all regions, I mean. It's high single digit.
For the SSG, yeah. As I've mentioned, it will compensate whatever negative we have in March for April, because we cannot give you the exact figure.
Not yet, anyway. Yeah.
an uptick. It is very promising, I would say. That is the only thing I can say. Very promising.
Ms. Rose, you cannot sleep.
Why?
You have to sell all these tiles and you have to go out the street and sell to substantiate your very promising promise.
Promising only. Take away the very, very. It is exaggerated.
Any more questions? If there are no more questions, we would like to thank everyone for joining us once again, and see you in our next earnings call.
Thank you.
Thank you.
Thank you.
Happy Mother's Day