Philippine Seven Corp., the local franchise holder of convenience store chain 7-Eleven, said Monday net income rose 32 percent in the first half to P472.3 million from a year ago, boosted by election-related spending and aggressive store expansion.
PSC said in a disclosure to the stock exchange retail sales of all stores increased 27 percent to P15.5 billion from P12.2 billion a year ago, as 148 stores were added to its network while 10 outlets were closed down.
Same-store sales also increased by mid-single digit during the period, while operating margin as a percentage of revenue from merchandise sales eased to 5 percent from 5.2 percent in 2015.
PSC’s store count reached 1,740 as of end June, up 23.8 percent 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,” PSC said.
The company said it aimed 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.”
Net income climbed 19 percent in the second quarter to P290 million while revenues increased 31.6 percent to P7.35 billion.
The company said of the 1,740 current store network, 1,474 stores were in Luzon, 203 in the Visayas and 63 in Mindanao.
Franchisees accounted for 57 percent of the total while 43 percent were corporate-owned stores.
PSC earlier set a capital spending P3.5 billion in 2016, higher than P3 billion it spent in 2015. Bulk of the said amount is allocated to new store opening, store renovation and equipment acquisition.
PSC opened the most number of new stores in its history last year. The company said it intended to accelerate the rate of new store openings over the medium-term to take advantage of improving economic conditions and to protect market share in light of increased competition.
“PSC 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,” the company said.