November 07, 2014

PGOLD posts 20% hike in 9M14 core net income

In a press statement, Puregold Price Club Inc (PGOLD) said its 9M14 net income grew 14% YoY to P3b on higher sales. Excluding the one-off gains last year, the figure would reflect a 20% growth. The results would also show that the 9M14 net income is almost double the P1.6b earnings posted in 1H14. It also implies that the 3Q14 net income grew 55%. The strong results can be traced to a rebound in sales which grew 15% to P59b.

The company also cited substantial supplier discounts which shored up gross margins.GPM in 9M14 was at 17.1% vs. 17.3% in 9M13 but higher than the 16.5% registered in 1H14 when an IT glitch failed to capture on time the rebates and supplier discounts arising from sales during a big customer promotional conference. Net profit margin was at 5%, slightly lower than 5.1% in 9M13 but higher than the 4.3% posted in 1H14

Our take: The 9M14 net income almost approximates our P3.88b full-year earnings estimate. We will review our forecasts pending the disclosure of more details on the interim results. - WealthSec