Net income rises 22% to Php267Mil. In a press release, SSI reported that 1Q15 net income rose
22% to Php267Mil largely due to higher revenues driven by store expansion. Revenues grew by
19% to Php4.0Bil as store footprint rose by 27% y/y. Meanwhile, an improvement in gross margin
and slower increases in key operating expenses such as rent and personnel expense led to a 20
basis point improvement in net margin to 6.7%. Results were in line with consensus expectations,
accounting for 20.8% of the full year forecast. Note that last year, the first quarter accounted for ~22%
of full year net income.
Top line growth still driven by store expansion. SSI’s 19% revenue growth continued to be driven
by store expansion. During 1Q15, SSI opened 23 new stores covering 4,100 sqm of selling space.
This brought SSI to a total of 746 specialty stores and a store footprint of 137,700 sqm, an increase
of 27% y/y. SSI also added seven new brands in 1Q15, namely the bridge brand Max & Co., the
accessories brands Charming Charlie and Radley, and the footwear brands Amazonas, Jelly Bunny,
Kurt Geiger, and Lipault. In total, SSI operated 112 brands as of end-1Q15.
Consensus has a BUY rating on SSI with a FV estimate of Php11.62/sh.
- COLfinancial
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