Philippine Seven Corp., the local franchise holder of convenience store 7-Eleven, booked a net income of P1.32 billion in 2017, up 12 percent from a year ago, boosted by store expansion and higher same store sales growth.
PSC said in a disclosure to the stock exchange net income in the fourth quarter surged 26 percent to P669.6 million from P532.1 in 2016.
System-wide sales in 2017 climbed 18 precent to P37.53 billion from P31.75 billion after opening 317 new stores and closing 27.
PSC said same store sales started with a 4.4-percent decline in the first quarter due to the high base year effect. Sales started to pick up in the succeeding quarters driven by new product launches to boost full year same store sales growth to 3.7 percent.
“2017 was far from our best year in terms of both same store sales growth and new store openings. The latter was a deliberate profit-taking move in response to reduced competitive activity, resulting in higher average new store sales, and the former due to high base effects in 2016,” PSC president and chief executive Jose Victor Paterno said
“We had initially relied on an increase in SKU count to increase sales, but it failed to deliver as much as hoped. The bright side to all this is that in our struggle to improve sales for the year, we ended up laying the foundation for same store sales growth in the future by running experiments on assortment and looking deeper into pricing, as well as expanding new lines like coffee and fried chicken,” he added.
Paterno said the company budgeted P3.5 billion in capital expenditures for 2018, with the bulk to be used to finance new store openings and renovations, and equipment acquisition in line with new product launches.
Around 54 percent of all 7-Eleven stores in the Philippines are franchise-operated and 46 percent corporate-owned.
Luzon has 1,802 7-Eleven stores, including 879 in Metro Manila, Visayas with 313 and Mindanao with 170.