Puregold posts 13.8% profit growth

MANILA, Philippines - Profits of Lucio Co’s grocery unit recuperated in the third quarter of the year following a lackluster first half performance, bringing its nine-month income level higher.

Puregold Price Club Inc. said robust supplier support and higher sales in the third quarter buoyed its net income to P3 billion in the January to September period, 13.8 percent higher from P2.64 billion recorded during the same period last year.

The nine-month profit growth was a turnaround from the 6.6 percent decline it booked in the first semester of the year.

Minus one-time capital markets earnings posted last year, Puregold said recurring net income grew 20 percent in the first three quarters from a year ago.

The country’s second largest grocery chain attributed its earnings hike primarily to rising supplier volume discounts, of which a significant portion was generated during the annual Aling Puring convention held last May at the World Trade Center.

Puregold said supplier volume discounts catapulted its third quarter net income 55 percent higher than in the same period a year ago.

“We are especially happy with the strong support our suppliers have been extending to us. They are truly our partners who make it possible for us to serve our customers the best way we can,” said Co, Puregold chairman.

Puregold’s sales revenues for the first nine months likewise saw a 16.1 percent jump year-on-year to P59.8 billion on the back of an increase in same store sales and the opening of 26 new stores this year.

The company said it plans to open five more new Puregold stores before the year ends.

“Our solid performance in the third quarter of this year reinforces our confidence that Puregold will continue to achieve substantial growth for the full year of 2014 both in terms of sales revenues and bottom line income,” Puregold president Leonardo B Dayao said.

Puregold recorded a gross profit margin on sales of 17.1 percent in the first three quarters, slightly down from 17.3 percent year-on-year but an improvement from 16.5 percent in the first half.

Net profit margin also fell a hairline to five percent as of end September from 5.1 percent a year ago.

The supermarket chain is already allocating around P3 billion next year to fund its expansion plans that will entail the opening of about 25 new stores.