Bloomberg News

Puregold Says It Will Probably Hit Profit Target; Shares Rally

December 13, 2011

Dec. 9 (Bloomberg) -- Puregold Price Club Inc., the second- largest Philippine operator of grocery stores and hypermarkets, said will probably meet its profit goal this year after luring more shoppers. The stock rose the most in a month.

“Things are looking up and based on the feedback of our store managers, consumer traffic is better than last year and they expect this to pick up some more as people get their bonuses,” Senior Vice President Aida de Guzman said by phone today. Puregold, which has 89 outlets, is “on track to achieving our targets” and will open its 100th store on Dec. 19, she said.

Manila-based Puregold President Leonardo Dayao on Oct. 5 forecast net income of 1.5 billion pesos to 1.6 billion pesos ($36.7 million) for this year. The company, which posted a 750 million peso profit in 2010, held an initial public offering earlier this year to pay debt and fund new stores, which Dayao said have grabbed market share prices lower than rivals’.

“The target is fairly optimistic and the key to reaching is their accelerated store expansion,” said Jomar Lacson, an analyst at Manila-based stock brokerage Campos Lanuza & Co. who recommends buying the shares. Puregold’s profit may reach 1.65 billion pesos this year, he said.

SM Competitor

The company posted a 1.08 billion peso nine-month net income this year, almost three times its 378 million peso profit in the same period a year earlier. The company said on Sept. 30 that it will open 38 stores this year. The fourth quarter accounts for 30 percent of sales and earnings, de Guzman said today.

Puregold shares rose 6.5 percent to 16.72 pesos at the close of trading in Manila, the most since Nov. 8. It’s the fourth-biggest percentage increase among shares that traded in Manila today. The benchmark Philippine Stock Exchange Index fell 0.5 percent.

Puregold competes with SM Investments Corp., the nation’s biggest retail group, with a network of 163 stores,including 41 department stores. SM’s retail operations posted a 12 percent gain in nine-month profit to 3.95 billion pesos, according to its website.

SM fell 1.4 percent to 521 pesos in Manila trading, extending its decline in the past year to 6.6 percent.

--Editors: Richard Frost, Frank Longid

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net; Darren Boey at dboey@bloomberg.net


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