Puregold Price Club Inc. is accelerating its expansion this year with capital expenditures of P3.7 billion amid an anticipated slower net sales.
Puregold said in a presentation during a recent investors’ briefing consolidated net sales would rise by 6 percent to 8 percent this year, slightly lower than the 10.6-percent growth registered in 2017.
Share price of Puregold has been on the downward trend since last week because of weaker-than-expected 2017 earnings and a disappointing 2018 revenue growth guidance.
Puregold said it would allot P1 billion out of the P3.7-billion capital expenditures this year to build 25 stores, P1.5 billion for the two S&R stores, P200 million for 12 S&R quick service restaurants and P50 million for 10 Lawson stores.
The company is spending P1.25 billion for IT system upgrade and and maintenance.
Funding for this year’s capital expenditures will primarily come from internally generated cash and short-term loans, if necessary.
Meanwhile, Puregold said the 6-percent to 8-percent increase in consolidated revenues this year woule be supported by the 2 percent to 4 percent same store sales growth, opening of new outlets and conversion of recently-acquired stores NE Bodega and Budgetlane supermarket.
The grocery chain, owned by businessman Lucio Co, is also expected to sustain its gross and net profit margins this year.
Puregold said it would continue to pursue acquisitions and expansion into new geographic locations this year. It operated 372 stores with 518,000 square meters of net selling area.
Out of 372 stores, 309 are Puregold outlet, 14 S&R stores 32 S&R quick service restaurants and 17 NE Bodega & Budgetlane stores.
Puregold last year acquired five B&W stores in Roxas City, Capiz, a move that will bolster its presence in the western Visayas region.
Puregold currently has over 1,500 suppliers and trade partners, serving over 300,000 sari-sari stores and small businesses as well as over 1 million Puregold Perks members.