Fontana profits reduced due to Waterloo superstore rollout

For the first quarter ended September 30, 2019, revenues for Jamaican pharmaceutical and retail giant Fontana was J$920.7 million, representing an 8.8 per cent increase over the $845.9 million recorded in the corresponding quarter of the previous year.

But, while gross profit also increased to $316.4 million or 7 per cent higher than the $295.7 million recorded in Q1/2018, profit shrunk to below $20 million.

Costs attached to the planned opening of the company’s new Waterloo Square location was cited as the cause.

In the first quarter, administration and promotional expenses reduced net profit to $18.37 million compared to $42.37 million earned in the similar quarter in 2018.

A 21 per cent rise in operating expenses overall  were attributed to its new Waterloo store where increased expenses were incurred to recruit and train  a new team,  in store set-up and  increased marketing and promotional activities. 

Fontana has five stores in Kingston, Montego Bay, Ocho Rios, Mandeville and Savanna-La-Ma. In October, it opened the Waterloo store which is its largest yet.

The Fontana store spans some 35,000 square feet and is  staffed by about 115 workers.