Higher same-store sales lift Puregold’s net income

EARNINGS of Puregold Price Club, Inc. improved by 9% in the third quarter of 2018, driven by higher consumer spending on account of higher take-home pay under the tax reform law.

In a regulatory filing, the Lucio L. Co-led firm said net income went up to P1.54 billion in the July to September period. This followed a 15.5% uptick in net sales to P35.79 billion in the same period.

On a nine-month basis, the listed firm recorded an 18% jump in earnings to P4.62 billion after system-wide net sales jumped 14% to P99.82 billion.

Puregold attributed the positive performance for the first nine months to strong same store sales growth (SSSG), which stood at 5.8% for its Puregold stores and 8.8% for S&R outlets.

“We are optimistic that we will be able to sustain our SSSG in the last quarter of 2018 to be driven by higher consumer spending fueled by higher levels of take-home pay as a result of the tax reform law,” the company said.

Aside from positive SSSG figures, it further noted that the new stores opened in 2017 were in full swing this year, contributing to the overall increase in net sales.

Given Puregold’s positive performance, its parent Cosco Capital, Inc. delivered a 17% increase in attributable profit to P1.31 billion during the third quarter. Net income attributable to the parent accordingly went up by 16% to P3.97 billion in the nine-month period.

Cosco reported a 27% increase in revenues to P42.94 billion in the three months ending September, pushing the ninemonth figure to P119.27 billion, 17% higher year-on-year.

Aside from Puregold and S&R Membership Shopping Club, Cosco also has a liquor distribution business under its portfolio where it sells the Alfonso Light Brandy and Alfonso Brandy, among others. This segment generated a 40.4% increase in revenues to P5.7 billion, after posting a 42% increase in volume of cases sold.

Meanwhile, Liquigaz Philippines Corp., which handles its specialty retailing segment, saw its revenues rise by 38% to P12.4 billion. It cited the recovery in global LPG prices and higher sales volumes as the growth drivers for the period.

In October, Cosco divested its entire stake in Liquigaz.

Shares in Puregold ended flat at P42 each on Wednesday, while shares in Cosco were also unchanged at P7 apiece.