DOUBLE-DIGIT earnings growth is "achievable" for Wilcon Depot Inc. this year and next, driven by high-single to low-teen improvement in sales, Maybank Investment Banking Group said Tuesday.

In a report, Maybank said that Wilcon could book 11-percent growth in net income this year and 16.5 percent in 2025 on the back of a projected topline increase of 9 percent and 13 percent, respectively.

The construction supplies retailer plans to launch 10 new stores — eight depots and two Do It Wilcon formats — in 2024 with a capital expenditure budget of P2.1 billion.

"This should fuel its FY24E (fiscal year 2024 estimate) sales growth target of high-single to low teens amid flattish to low-single-digit SSSG (same-store sales growth) guidance," the investment bank noted.

Wilcon last month reported that net income slipped by 9.5 percent to P3.5 billion last year, from P3.8 billion in 2022, while its consolidated sales grew by 3.1 percent to P34.6 billion from P33.6 billion.

Lorraine Belo-Cincochan, Wilcon president and chief executive officer, has said that they remain optimistic about hitting the 100-store target this year, earlier than the original 2025 plan.

"While the first quarter of 2024 indications point to soft demand in February and an even softer March print from the long Holy Week holiday, we believe the key to improving SSSG is ticket size growth and product mix diversification," Maybank said.

The company is also seen benefiting from more aggressive expansion in underpenetrated regions, as this could boost its operating results.

Balance sheet and cash generation were also said to be strong enough to bankroll Wilcon's growth and potential acquisitions, with net cash balance as of end-2023 enabling the firm to enhance "inventory days and anticipate supply chain disruptions."

Although Wilcon may take advantage of the construction boom, robust property sector, and growing middle class, Maybank warned that potential competitive pressure could dampen its profitability moving forward.

The home design retailer opened nine stores last year, bringing its total store count to 90 by the year-end. A third of these new launches were in the fourth quarter of 2023.

"[W]e remain confident that we will be able to adapt to the post-Covid home improvement market by being consistently customer-centric and improving our operations to continually give excellent value to our customers," Belo-Cincochan said.

Wilcon shares fell by 1.02 percent to P17.50 each on Tuesday.