METRO Retail Stores Group Inc. (MRSGI) on Monday said it earned P50.3 million in the first quarter, down 16 percent from P60 million a year earlier, due to lower contributions from the general merchandise business.

Net sales, however, were 4.8 percent higher at P8.7 billion and were the highest recorded for January-March since its public listing in 2015.

The food retail business was said to have grown 7.9 percent on robust sales of basic groceries, while the general merchandise category dipped 2.9 percent following lower discretionary spending amid inflationary pressures.

The decline in general merchandise sales resulted in a blended gross margin of 20.8 percent, from 21.9 percent last year.

Cost of sales inched up 6.5 percent to P6.9 billion from P6.5 million, in relation to higher sales during the period.

The Gaisano-led supermarket operator managed to control the increase of its operating expenses, which only widened by 2.1 percent to P1.78 billion from P1.75 billion.

"While the company continued to implement cost reduction and saving measures, there were significant increases in rent and personnel costs," it said in a statement.

During the firm's annual stockholders' meeting earlier this month, MRSGI President and COO Manuel Alberto said they were "poised for growth with cautious optimism" this year.

"Our strategic plans are geared towards calibrated expansion, enhancing our online presence, and continuing to modernize our stores," he added.

The company recently launched a Metro Value Mart in Lapu-Lapu City, Cebu, along with five supermarkets in strategic areas in Cebu and Leyte, to expand its footprint in the Visayas region.

MRSGI's Monday share price was unchanged at P1.30 apiece.

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