Puregold nets P469M in Q1

MANILA, Philippines—Retailer Puregold Price Club grew its first-quarter net profit by 24.5 percent to P469 million year on year as robust domestic consumer spending and new store openings sustained a double-digit growth in sales.

In a regulatory filing, Puregold reported that its net sales for the three-month period had gone up by 30.3 percent year on year to P10.74 billion largely due to the increase in turnover as a result of the opening of new stores in the latter three quarters of last year.

Cost of sales amounted to P8.99 billion, up 30.3 percent year on year, due to the opening of new stores, which was partially offset by an increase in conditional discounts from the company’s suppliers.

Puregold’s gross profit increased by 31.9 percent to P1.74 billion from a year ago.

The company, which is led by the family of Filipino-Chinese businessman Lucio Co, had a total of 101 stores in operation, including 62 hypermarkets, 28 supermarkets and 11 discounters as of end-March.

The retailer’s capital spending for this year is budgeted at P3 billion. The plan is to open 25 new stores, including the first hypermarket that was already opened in La Trinidad, Benguet, in January. Continuing suppliers’ support arising from scale of operations is seen to contribute to the sustainability of margins. Puregold aims to maintain gross and net profit margins at least 14 percent and 4 percent, respectively, this year.

With its forthcoming acquisition of the S&R membership shopping business for P16.5 billion, Puregold also hopes to address the upscale retail market. This transaction is seen boosting its net profits by 4-7 percent. Before the S&R takeover plan was finalized, Puregold was aiming for a net profit of P1.94 billion this year equivalent to earnings per share of P0.97.

S&R was set up in 2000 in partnership with Price Smart of the US and acquired by the Co family in 2006. It is operated by Kareila Management Corp. S&R operates six stores located at Bonifacio Global City; Congressional Ave. in Quezon City; Alabang, Muntinlupa; Aseana business park in Baclaran; San Fernando in Pampanga; and Mandaue City in Cebu.