The Tantoco family-led SSI Group Inc. is feeling the strain from weaker consumer spending as inflation, fuel shocks and tighter household budgets push shoppers toward discounts while weighing on luxury purchases.
Net income plunged 58.5 percent to P152.9 million in the first quarter even as revenues climbed 11.4 percent to P7.64 billion, showing that higher store traffic is becoming harder to turn into profit.
Gross margins narrowed to 42.6 percent from 44.6 percent as SSI relied more on discounts and promotions to keep customers spending in a softer retail environment.
Luxury softens, essentials strengthen
The slowdown was most visible in luxury and bridge brands, where sales slipped 1.7 percent, while shoppers spent more on personal care, food, home products, footwear and accessories.
At the same time, expansion and inflation pushed costs higher, with operating expenses rising nearly 16 percent as rent, manpower, utilities and security expenses climbed.
Rising inventory, store closures
Inventory remained high at P12.46 billion, equivalent to about eight months worth of stock, as the retailer balanced expansion plans with slower spending on non-essential items.
EBITDA fell 18.4 percent to P761 million as discounts and rising costs eroded earnings quality.
SSI opened five new stores during the quarter but also permanently shut 14 stores, reducing its total selling space to about 123,941 square meters from 128,776 square meters at end-2025 as it adjusted its footprint to changing shopping patterns.
—Edited by Miguel R. Camus
