Philippine Seven Corp. (PSC), the operator of 7-Eleven convenience stores in the country, has reported a significant dip in sales, by as much as 20 percent, attributed to the incessant monsoon rains experienced over the past two weeks. Despite a strong performance up until July, bolstered by its annual “7-11 day” promotion, the company acknowledges the sensitivity of its sales to adverse weather conditions.
Lawrence de Leon, PSC head of finance and investor relations, highlighted during the PSE STAR investor day that while store clustering across residential areas offers some sales recovery during school or work suspensions, it has not been sufficient to maintain positive growth amidst the severe weather.
Beyond domestic weather challenges, PSC’s operations also faced potential disruptions from the Middle East crisis. However, the company proactively mitigated this risk by engaging in a “forward buying” exercise, investing over P1 billion to secure three months’ worth of supplies. While this strategic move safeguarded against supply chain interruptions, it temporarily strained the company’s free cash flow, resulting in negative growth for the first half of the year. De Leon expressed confidence that this financial impact is temporary.
Looking ahead, PSC remains committed to its long-term development plan, which includes expanding its footprint in the Visayas and Mindanao regions. This expansion is supported by robust logistical investments, with the company currently operating 28 distribution centers across Luzon and Visayas. PSC’s presence in Visayas dates back to 2012, demonstrating a sustained commitment to southern expansion.
De Leon noted that shareholders view the Philippine 7-Eleven’s growth potential favorably, particularly when compared to other emerging market operators like Thailand, which boasts significantly more storefronts despite a higher GDP per capita. Investors, he stated, are focused on the company’s capacity for store openings over a 10-year horizon, rather than short-term five-year outlooks, underscoring confidence in the long-term prospects of 7-Eleven in the Philippines.
