Philippine Seven Corp., the local licensee of 7-Eleven convenience stores, posted a net income of P533 million in the first six months of 2018, up 19.4 percent from P446 million year-on-year, despite an increase in commodity prices following implementation of the government’s tax reform agenda.
PSC, which operates the largest convenience store network in the country, said in a disclosure to the stock exchange retail sales of all stores totaled P22.2 billion during the period, up 22.7 percent from a year ago.
The higher sales were driven by the improvement in same-store sales and the 14-percent increase in the number of operating stores. Stores rose by 299 to end the period with 2,386.
The convenience store operator said the new TRAIN Law (Tax Reform for Acceleration and Inclusion) favorably affected sales by increasing customer count and the average basket size.
The lower personal income tax featured in the TRAIN strengthened the purchasing power of the middle-class while the excise tax on sugar-sweetened beverages increased selling price without resulting in a decline in sales volume.
PSC said net income in the second quarter climbed 18.9 percent to P342 million from P2.88 million in the same quarter a year ago.
Second-quarter revenues surged 19.2 percent to P11.55 billion from a year ago level of P9.69 billion.
PSC said it remained on track on its store expansion program. It will also continue to invest in opening new stores in existing and new markets even if competition had slowed down.
PSC said its capacity building expenditures on logistics assets and organizational capability had produced favorable results.
“There are various programs lined up covering expanding merchandise assortment and launching of new food and beverage items to serve as differentiation compared with other channels,” PSC said.
PSC earlier said it would spend at least P3.5 billion to support its store expansion strategy. The company is allocating the bulk of the amount to new store openings, store renovation, and equipment acquisition.
