'Costs controls' save Puregold H1 profit from slump amid weak sales

MANILA, Philippines — Cost-saving measures helped listed grocery operator Puregold Price Club Inc. avert an earnings slump in the first half amid weak sales, posting a double-digit net income growth.

In a disclosure to the Philippine Stock Exchange on Monday, Puregold reported a net income of P3.99 billion during the January-June period, growing 17.3% year-on-year.

Puregold emerged as one of the rare pandemic winners last year, after harsh lockdowns triggered panic-buying that, in turn, pushed up the company’s earnings. But as prolonged restrictions continue to weigh on the economy, Puregold’s latest financial results showed the company is now feeling the sting of the health crisis, and investors seemed to have noticed that.

On Monday, shares in Puregold lost 1.73% to close at P39.70 apiece, bucking an uptrend in the main index.

In the first six months, Puregold said its net sales fell 7.1% on-year to P76.18 billion. About 72% of the company’s revenues came from its Puregold stores while the remaining 28% was generated by its S&R Membership warehouse clubs and S&R New York Style Pizza stores.

Despite the sales slump, consolidated income from operations went up 7.5% to P6.14 billion, thanks to “strategic costs controls” that the company did not elaborate. To reach more customers amid mobility curbs, Vincent Co, company president, said Puregold is beefing up its digitization efforts.

“Puregold’s innovative digitization approach through our Puregold Mobile app, Puregold Channel and our e-commerce website will enable us to connect seamlessly with our consumers during this COVID-19 pandemic and at the same time strengthens customer loyalty,” Co said.

The pandemic did not stop Puregold from expanding its footprint, after it opened 15 out of 30 of its planned stores as of June. Membership-only supermarket S&R, meanwhile, plans to open two new warehouse branches in the second half of 2021.