Upson International Corp (PSE: UPSON), a leading IT retailer in the Philippines, reported record revenues of ₱10 billion in 2023, gross profit of ₱2.1 billion, net income of ₱464.2 million, and earnings per share of ₱0.16.
Revenues rose 5.8% year-over-year to a historic high of ₱10 billion, fueled by revenue growth from new stores which have operated for less than one year. Comparable sales from existing stores increased 1%.
By product category, Computers were the primary driver of the increase led by mid-range laptops. Printing and Communication also contributed positively, partly offset by decreases in sales of Storage and Components.
By geography, markets remained broadly stable with Visayas posting the fastest growth followed by North Mindanao.
“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 ₱10 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.”
The cost of inventories sold was up 8.9% to ₱7.9 billion, resulting in a gross margin of 20.8% compared with 23% in 2022. The margin contraction was due to revenue mix and lower product margin rates from increased promotions, including product bundling and price discounts.
Operating expenses were up 9.5% to ₱1.7 billion in support of the company’s strategic growth initiatives, specifically relating to store and warehouse network expansion. These higher expenses were mostly lease payments, contracted and other services, depreciation and amortization, and personnel-related costs. As a percentage of sales, operating expenses were slightly up from 16.2% to 16.7% in 2023.
Net income declined 13.7% to ₱464.2 million as a result of lower gross margin and pre-opening costs, helped by Other income mainly through promotional support from suppliers, such as volume-based rebates and sell-out incentive programs as well as inventory price protection to drive demand and replacement cycles.
Upson opened 25 new stores in 2023, 12 of which in the fourth quarter, ending the year with 232 stores.
To broaden its product offering, Upson introduced 12 tech brands including AUKEY, ESR, Garmin, MOMAX, Verbatim, MONOCOZZI, and Cricut. It also began to set up Apple corners in select stores which brought customers greater access to the brand. Upson now carries 115 tech brands in its portfolio.
Based on the company’s operating results and management’s outlook for the current year, its Board of Directors declared a cash dividend of ₱187.5 million or ₱0.06 per share, rising 36% from 2022 and marking the fourth consecutive year that the company has paid cash dividends.
