PUREGOLD PRICE Club, Inc. targets to grow consolidated net sales by 8-10% in 2019, banking on the opening of more stores and the positive performance of more mature branches.
In a quarterly presentation posted on its website, the listed supermarket operator said it expects net sales growth from organic Puregold and S&R stores to support its target. It has also set a guidance of 3-5% same-store sales growth (SSSG) for both Puregold and S&R.
So far, the company led by tycoon Lucio C. Co has grown consolidated net sales by 12.8% to P34.83 billion in the first quarter of the year. Consolidated profit accordingly climbed 11.9% to P1.51 billion.
Puregold stores accounted for 76% of consolidated net sales, while the rest came from S&R Membership Warehouse clubs and its quick-service restaurant outlets.
SSSG for Puregold and S&R outlets stood at 6.9% and 9.4%, respectively.
The firm attributed the positive performance to higher consumer spending, driven by minimum wage inflation and the inflation slowdown seen during the start of the year.
Puregold has committed to spend P5.2 billion in capital expenditures (capex) this year to finance its expansion. Bulk of the spending will go to the development of four S&R stores at P3.2 billion, while the construction of 25 new Puregold stores will require P1 billion.
About P180 million will be spent for 10 S&R New York Style Pizza stores, while the remaining P800 million will be for maintenance capex.
The company will use internally generated cash to fund the capex, but noted that it may resort to short-term untapped bank credit lines if necessary.
For the first-quarter, the company has already opened eight new Puregold stores and one S&R Warehouse. This brought its total store network to 417, covering over 550,000 square meters in net selling area.
Puregold also said it will pursue new acquisitions in 2019. The company previously acquired existing grocery chains to support its expansion, including NE Bodega supermarket in Nueva Ecija, Luzon-based supermarket chain Budgetlane, and retailer B&W in Roxas City in Capiz.
The company is currently awaiting approval from stockholders and the Securities and Exchange Commission to increase its authorized capital stock to P5 billion consisting of five billion shares with a par value of P1 each.
This will give the company leeway to conduct fund-raising activities in the future, as it has almost exhausted its capital stock following the P4.69-billion top-up share placement it conducted in January.
Shares in Puregold were down by one percent of 45 centavos to close at P44.35 each at the stock exchange on Friday. — Arra B. Francia