Tycoon Lucio Co-led retailer Puregold Price Club Inc. saw an 11.9-percent year-on-year growth in first quarter net profit to P1.51 billion as higher minimum wage and benign inflation boosted consumer spending.
Puregold contributed bulk of the profits of parent conglomerate Cosco Capital Inc., which grew its consolidated core net income by 9.3 percent year-on-year to P2.06 billion in the first quarter.
Including the gain realized from the sale of Liquigaz Philippines Corp., Cosco’s consolidated net income surged by 436 percent year-on-year to P10 billion in the first three months.
For Puregold, consolidated net sales increased by 12.8 percent year-on-year to P34.83 billion in the first quarter, 76 percent of which was contributed by the flagship Puregold network, while 24 percent came from S&R Membership warehouse clubs and S&R New York Style Pizza stores.
For every P1 sold by the group in its 417-store network, it earned 4.3 centavos.
Income from the Puregold group’s operations grew by 9.1 percent year-on-year to P2.57 billion in the first three months.
Puregold stores registered stronger than expected same-store sales growth (SSSG) of 6.9 percent in 2018 while S&R saw an SSSG of 9.4 percent during the same period. The growth was attributed to higher consumer spending, fueled by the increase in minimum wage starting 2018 and easing inflation starting 2019.
As of end-March, Puregold group’s network comprised 362 Puregold stores, 17 S&R membership shopping warehouses, and 38 S&R New York Style QSR with a total net selling area of around 550,000 square meters.
For 2019, Puregold aims to add 25 new Puregold stores and four new S&R warehouses as part of its store network expansion.
For Cosco, first quarter net income attributable to equity holders of parent company grew by 605 percent to P8.53 billion due to gains booked from the sale of Liquigaz. Without such nonrecurring gain, Cosco’s core net attributable income to equity holders grew by 8.9 percent year-on-year to P1.32 billion.
Puregold contributed 58 percent of total profits, followed by the commercial real estate segment with 23 percent and liquor distribution with 17 percent. The group’s specialty retailing segment, Office Warehouse Inc., accounted for 2 percent of net profit.