7-Eleven operator trims losses as sales improve

Photo from Business World

By Business World

Listed convenience store operator Philippine Seven Corp. narrowed its net loss by 7.4% in the quarter ending September to P181.1 million from P195.6 million on the back of an improvement in sales.

In a disclosure to the exchange on Friday, Philippine Seven said its improved total sales is due to the increased number of operating stores as well as lower base year effect.

“The slowing rate of decrease in same store sales occurred as the adverse impact of the pandemic already matured,” the company said. “The full recovery in sales remains to be dependent on the rate of infection and vaccination efforts.”

The listed firm behind 7-Eleven stores said it logged a 3.4% growth in same store sales in the July-to-September period, better than the 25.2% contraction from a year ago.

“This is the first growth in same store sales after five consecutive quarters of negative growth. The downgrade to a lower quarantine alert level and easing of mobility restrictions contributed favorable to increase in sales,” the company said.

Same stores sales growth (SSSG) in the second quarter this year contracted by 5.1%, and dropped by 20.1% in the first quarter. The last three quarters of 2020 also posted a negative SSSG, ending 2020 with a contraction of 18.4%.

System-wide sales for the third quarter improved by 10.1% to P11.33 billion from P10.29 billion in the same period last year due to improved SSSG.

Merchandise sales revenues also improved by 9.8% to P10.1 billion. This takes into account retail sales of corporate stores, merchandise sold to franchisees at cost, as well as the merchandise sales of five neighborhood wholesale stores.

For the three quarters ending September, Philippine Seven incurred a net loss of P584 million, inching down from the P585.3-million loss recorded year on year.

The company said its average sales are still less than 80% of its pre-pandemic sales and are “a drag to profitability.”

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