Ramayana expects brisk sales from back-to-school season
PT Ramayana Lestari Sentosa (RALS) expects brisk sales in this third quarter, this year owing to the shopping spree by parents outfitting their children for the new school year this July and the Idul Fitri holiday shopping falling in August.
Ramayana, which operates the Ramayana, Robinson and Cahaya department stores, expects sales of Rp 3 trillion (US$324 million) in the third quarter, almost twice of the sales target for the second and fourth quarters.
“The [sales] cycle will peak in the third quarter between July and September because of ‘back-to-school’ activities, followed by the fasting and Lebaran [Idul Fitri] season,” Suryanto, Ramayana finance director said.
“Then the sales target would fall again to Rp 1.6 trillion in the fourth quarter, when shares would be similar targets in the second quarter,” he further added, given that Christmas and New Year festivities were weaker sales drivers.
To cope with the spiking demand, the company has started to increase the volume of their stocked goods by at least twice the normal amount, he added. He further said that departments stores would become the dominant sales contributor during the back-to-school and Lebaran season, replacing supermarkets, which had ruled sales up to the second quarter. Ramayana mainly serves low- and middle-income people as its main market segment.
“We will refer to last years trends in deciding which items we would increase stocks of,” he said.
In addition to brisk sales, the company has also sets sights in opening the remaining two of the five new stores the company has aimed to inaugurate this year. The two new stores, located in Parung, West Java and Sorong, West Papua, would both be ready this August.
The company would had around 107 stores by the end of last year.
“However, we may open more stores than targeted,” Suryanto noted, adding that the company has prepared a budget of roughly Rp 400 billion from their internal cash for these expansions.
He added that the company has applied a 5 percent same store growth for both old and new stores, further pointing out that sales from stores outside of Java would continue to contribute significantly, or around 46 percent, to overall sales.
Ramayana continues to pursue their strategy of expanding their stores in areas outside Java, where there is a large mass of industries and factories, as well as transmigrants. Their expansions are also based on promising economic factors such as the rise in regional minimum wages and stable commodity prices, including coal.
Indonesia’s economy grew by 6.5 percent last year and is set to grow 6 percent this year.
Suryanto pointed out that the company’s sales reached Rp 1.4 trillion in the first quarter of 2012, which constitutes 17.9 percent of the annual target and is 11 percent higher compared to the same period last year.
Based on these trends, the company has targeted their sales at Rp 7.5 trillion, which is 13 percent more than 2011.
“Our first quarter profit is Rp 40 billion, while this year’s overall target is Rp 440 billion. The first quarter’s profit is around 30 percent higher from the same period last year, with Rp 30 billion,” he said.
The company also agreed to disburse Rp 212.9 billion to pay out dividends worth Rp 30 per share, bringing the pay out ratio to 57 percent on net profits of 2011 worth Rp 377.6 billion.
Ramayana’s stock closed at it’s highest point equating to Rp 1,000 on Friday after touching its lowest point of Rp 980.