Election spending boosts 7-Eleven income
MANILA, Philippines – Philippine Seven Corporation, the local franchise holder of convenience store chain 7-Eleven, saw its net income for the first 6 months of the year grow by 32.5% to P472.3 million, boosted by election-related spending and aggressive store expansion.
In a disclosure to the stock exchange, PSC said retail sales of all stores went up by 27.2% to P15.5 billion, from P12.2 billion a year ago as 148 stores were added to its network while 10 were closed down.
As of end June 2016, Philippine Seven's store count reached 1,740, up 23.8% from 1,405 from the same period a year ago.
"The company is set to attain another milestone this year in terms of store count and profitability. While competition is likely to be more intense, PSC is the most capable to strengthen its position in the convenience store sector," Philippine Seven said.
"It aims to capitalize on its first-mover advantage and intends to benefit from the capacity-building expenditures over the last three years. It believes that the market will continue to grow as it enables the organization in achieving new heights," it added.
For the second quarter alone, net income stood at climbed 19% to P290 million while revenues increased by 31.6% to P7.35 billion.
Store expansion continues
Out of the 1,740 current store network, 1,474 7-Eleven stores are in Luzon, 203 in Visayas and 63 in Mindanao.
Franchisees account for 57% of total while 43% are corporate-owned stores.
The convenience store chain earlier set a capital spending P3.5 billion for 2016, higher than the P3 billion spent in 2015. Bulk of the said amount is allocated for new store opening, store renovation and equipment acquisition.
Philippine Seven opened the most number of new stores in its history last year.
It intends to accelerate the rate of new store openings over the medium-term to take advantage of improving economic conditions and to protect its market share in light of increased competition.
Philippine Seven "believes that the convenience store sector will remain to be crowded over the next five years. It intends to capitalize on its first-mover advantage and economies of scale to remain the market leader." – Rappler.com