Puregold sees higher sales from new stores

By Miguel R. Camus, BusinessMirror

Posted at Mar 02 2012 11:07 AM | Updated as of Mar 02 2012 07:07 PM

MANILA, Philippines - Puregold Price Club Inc., the Philippines’ second-biggest supermarket chain, said 2012 sales are forecast to grow by a quarter from P39 billion last year on the back of new store openings. 

Puregold is opening 25 stores to end the year with 125 branches. It plans to launch 10 new stores in north Luzon, 11 stores in south Luzon, and four branches in Metro Manila.

The company said projected capital spending in 2012 would hit P3 billion, with two-thirds of the budget to come from proceeds from its P7.5-billion initial public offering in September last year, alongside internally generated cash, based on briefing materials presented to analysts on Thursday.

Puregold shares rose 1.87 percent to P21.75 each on Thursday, giving it a market value of P43.5 billion.

The supermarket chain said earnings will be supported by new stores, full-year contributions from 38 branches that were opened last year and growth in terms of “like-for-like” net sales anticipated at 4 percent. The company expects gross and net profit margins at 14 percent and 4 percent, respectively, for 2012.

An additional income boost could come from the proposed acquisition or merger with sister company S&R Membership Shopping Club, which caters to upscale shoppers  while Puregold targets the middle-income to lower-income market.

At present, S&R is owned by Karelia Management Corp., a privately held corporation controlled by Puregold owner Lucio Co.

S&R has four Metro Manila branches situated in Alabang, Fort Bonifacio,  Quezon City, Alabang,  and Paranaque. It also has two locations outside the metropolis, namely in Mandaue City in Cebu and San Fernando City in Pampanga.

Puregold reported earlier that net income rose more than three times to P1.54 billion in 2011, in line with its previous forecast.