• Net income slumps as expenses jump and sales stay soft
• Inventory levels rise ahead of holiday season
• Footwear and luggage deliver the strongest lift
The Tantoco family’s SSI Group, one of the country’s biggest retailers of luxury and designer goods, posted a sharp earnings downturn for the first nine months of 2025 as operating costs surged and sales momentum slowed.
Net income fell nearly 50 percent to P640 million from P1.26 billion last year while operating income dropped to P914 million from P1.66 billion.
Third quarter profit alone plunged 65 percent to P188.1 million. While sales typically slow during the ghost month period, this year’s profit drop stands in contrast to the 2024 third quarter when net income grew 3.2 percent.
SSI’s brands and joint ventures include luxury houses such as Hermes, Prada and Versace alongside other well-known brands like Zara and Muji.
Slowdown in luxury sales
Revenue inched up only 0.7 percent to P20.32 billion as weak high end discretionary spending during the third quarter offset gains in selected categories.
Third quarter sales slipped 0.9 percent to P6.88 billion. Luxury and bridge revenue declined 3.8 percent and casual wear fell 2.9 percent. These were the key drags despite steady foot traffic.
The standout was footwear, accessories and luggage which jumped 30.3 percent. Fast fashion improved 0.9 percent and other categories including personal care and home goods rose 1.7 percent. E-commerce contributed P1.57 billion or 7.7 percent of total sales.
What drove the decline
Margins improved but expense growth outpaced revenue. Gross profit rose 1.9 percent to P9.08 billion and merchandise margin increased to 44.7 percent from 44.2 percent. Third quarter merchandise margin reached 45.4 percent.
Expenses told a different story. Operating costs climbed 12.4 percent to P8.18 billion due to higher rent and occupancy, depreciation and personnel spending.
Selling area expanded 13.6 percent which lifted related costs including utilities and marketing charges. General and administrative expenses grew 17.4 percent driven by systems upgrades to SAP and ETP platforms.
Earnings before interest, tax, depreciation and amortization dropped 16 percent to P2.32 billion.
Operational backdrop
The group operated 613 stores with 127,066 square meters of selling space at the end of September after opening 17 stores and closing two during the quarter.
Growth was concentrated in contemporary luxury, fast fashion, athleisure and personal care.
Inventories reached P13.15 billion compared to P10.19 billion at year end 2024.
The holding period translates to over 10 months worth of inventory, which is above the stated 8-9 month target, which could indicate the company is stocking up ahead of the busy holiday season.
—Edited by Miguel R. Camus
