PHILIPPINE Seven Corp. reported a profit of P1.44 billion last year, down 5.6 percent from the prior year’s P1.53 billion, citing accounting adjustments.
“Upon exclusion of the impact of the new standard, net income should have grown by 29.8 percent year-on-year,” the company said, referring to the Philippine Financial Reporting Standard 16 that covers recognitions on leases.
Philippine Seven, which holds the superfranchise for 7-Eleven stores in the Philippines, posted same-store sales of 10.3 percent.
“Retail sales of all stores aggregated to P56.3 billion, up 22.1 percent from P46.1 billion in 2018. This was driven by increase in sales and higher number of stores, which rose by 12.3 percent to end the year with 2,864 7-Eleven stores all over the Philippines,” it said.
Philippine Seven said it added 349 new stores against 35 closures in 2019. The company has 2,180 stores in Luzon, 410 in Visayas and 274 in Mindanao.
Its franchised-stores accounted for 55 percent of the total, while the remaining 45 percent are corporate-owned.
Philippine Seven said it continues to address the impact of the coronavirus disease 2019 (COVID-19) and the challenges amid the enhanced community quarantine (ECQ).
“Even as we were in the midst of preparing the Company to adapt to the Covid-19 environment, a quarantine of such suddenness and severity was unexpected. Overnight, we faced challenges keeping stores staffed due to lack of public transport. We encountered supply chain bottlenecks for goods both entering and leaving our DCs due to checkpoints, and difficulties in cash management with a fraction of bank branches operational. We experienced unprecedented drops in customer count and spikes in average ticket as quarantine passes limited shopping trips to one person per household,” said Jose Victor Paterno, Philippine Seven president.
“We have spent the time since working around such challenges, and adapting our operation to what we believe will be a fundamentally different landscape even after ECQ is eased. We expect impact on financial results for the second quarter to be very significant, depending on what post-ECQ environment is like and how quickly we are able to adapt,” he added.
Paterno said the company’s overarching priority “remains to be the health and well being of our franchisees and employees, who are called on to fulfill essential retail services in their communities wherever possible and needed.”
He said the company supports them by reducing their working hours and suspending operations if access to stores is not possible, while putting emphasis on good hygiene and social distancing measures inside the premises.
“Moreover, we supplied our frontliners with the necessary personal protective equipment and maintained the availability of disinfectants, cleaning supplies and food supplements. We have also provided added compensation in the form of meals, transportation and hazard allowances to all employees of corporate and franchise stores,” Paterno added.
