By Heather Caitlin P. Mañago, Researcher
SHARES in Puregold Price Club, Inc. rose last week after the retailer posted higher first-quarter (Q1) earnings.
Philippine Stock Exchange (PSE) data showed that Puregold was the sixth most actively traded stock last week, with 22.89 million shares valued at P1.06 billion traded from May 11 to fifteen.
The listed retailer closed at P45.85 per share on Friday, up 4.4% from its P43.90 finish per week earlier. The stock outperformed each the services sector’s 3.3% gain and the benchmark Philippine Stock Exchange index’s (PSEi) 0.3% increase through the period.
Because the start of the yr, Puregold shares have climbed 20.7%, trailing the services sector’s 26.6% growth but outperforming the PSEi’s 1.3% decline.
“[Puregold’s] opening price this week was a direct market response to what was a genuinely strong quarterly print,” Regina Capital Development Corp. Equity Analyst Jasper Timoteo A. Ondap said in an e-mail.
He said the corporate’s net income and consolidated net sales “got here in well above what we had penciled in.”
Aniceto K. Pangan, equity trader at Diversified Securities, said the stock’s gains were driven by “double-digit revenue growth… and greater than 20% income growth within the [first quarter].”
In a regulatory filing on Wednesday last week, Puregold reported a 23.7% increase in attributable net income to P3.26 billion within the January-to-March period from P2.64 billion a yr earlier.
Gross revenue rose 12.1% to P59.76 billion from P53.32 billion previously.
In a separate statement, the corporate said first-quarter growth was supported by positive same-store sales growth (SSSG). Puregold stores posted a 5.4% increase as a result of higher basket sizes, while S&R Warehouse Clubs recorded 12% growth on higher customer traffic.
Puregold said earnings growth was “driven by strong topline growth and complemented by improvement in gross margins.”
Mr. Ondap said S&R’s performance may reflect “more frequent, normalized shopping relatively than bulk buying.”
Despite the retailer’s strong first-quarter results, analysts said geopolitical tensions within the Middle East may proceed to weigh on consumer spending and inflation in the approaching months.
“We may expect the expansion to be carried over within the [second quarter] on a lighter effect as a result of the high inflation effect of the Middle East conflict that negatively affects disposable income in March, April, and going forward,” Mr. Pangan said in a Viber message.
He added that inflationary pressures could persist if disruptions involving the Strait of Hormuz proceed to affect global markets.
Mr. Ondap said Puregold’s staples-heavy product mix could provide some protection as consumers shift toward lower-cost goods, although S&R’s discretionary segments may face greater risks if household spending weakens further.
“We’ll must see how [the second quarter] plays out to see the complete effect of the conflict to [Puregold’s] performance,” he said.
“The approaching months remain shaky if macro conditions don’t improve, as a result of tighter spending, a shift to budget options, and better input and transportation costs, all of which can hit consumers and retailers alike.”
For the subsequent trading week, Mr. Pangan identified immediate support at P45.90 and resistance at P47.15.
Mr. Ondap placed support between P43 and P43.90, while resistance levels were seen between P47 and P49.