Puregold income growth tamed by higher cost, margin squeeze

Puregold Price Club Inc. said Tuesday net profit in the nine months of 2023 rose 2.1 percent year-on-year to P6.6 billion, failing to match the growth sales as margins were compressed and operating expenses rise.

The listed retail venture of tycoon Lucio Co reported revenue for the January-September period increased 9.2 percent to P139.3 billion.

Puregold attributed the revenue growth to higher customer traffic, which resulted in a 4.8 percent increase in same store sales of Puregold Stores and a 4.1 percent increase in S&R Warehouse clubs. Improvement in same store sales continued to normalize starting in the second quarter. 

The company said it continues to see a buoyant trajectory in topline growth for the balance of the year.

Cost of sales rose 9.8 percent to P113.76 billion while operating expenses increased 11.8 percent to 17.81 billion in the first nine months of 2023.

The retail group realized an increase of 6.5 percent in gross profit to P25.54 billion,  resulting in a 18.3 percent margin. In the same period last year, the gross profit margin stood at  18.8 percent.

At the end of September, the listed retail group had a total 558 stores nationwide, with the opening this year of 30 new Puregold stores, 2 S&R Membership Shopping Warehouse and 2 S&R New York Style QSR.