7-Eleven Incurred Net Loss of PhP390.0M in the First Half

• The Company incurred a net loss of PhP390.0 million during the first six months of 2020 brought about by the decline in sales due to the enforcement of strict lockdown measures.
• The impact of the various levels of community quarantine was fully felt in the second quarter as same-store sales significantly dropped by 25.5%. This is attributed to the sharp decrease in average customer count.
• The emergence of the new coronavirus has created a global pandemic. In a move to contain the spread of COVID-19, strict lockdown measures were implemented. This has caused supply chain disruptions and affected commercial activities. At the end of June, more than 90% of all 7-Eleven stores are open to provide essential products and services to communities where it is present.

Philippine Seven Corporation (PSC), the local licensee of 7-Eleven Convenience Stores, registered a net loss of PhP493.5 million and PhP389.7 million in the second quarter and first half of 2020, respectively.

Retail sales of all stores decreased by 31.4% in the second quarter to PhP9.9 billion owing to the sharp decline in same-store sales by 25.5%. On a year-to-date basis, all store sales went down 10.9% to PhP24.1 billion, while YTD same-store sales stood at +2.5%.

The emergence of the new coronavirus has created a global pandemic. The impact is unprecedented and continues to threaten global economies and the capacity of health care systems. Clearly, the Philippines is no exception to the adverse effect of this public health crisis. The lockdown measures imposed in the country is one of the longest and strictest compared with other countries. However, the number of cases keep on rising as the government ramps up testing to gain more visibilty on how the virus spreads. The various levels of community quarantine in the National Capital Region affected supply-chain and the movement of individuals due to the lack of public transportation.

This continues to affect the sales of 7-Eleven as well as the ability of its frontliners to access the stores. During the first few weeks of the enhanced community quarantine, up to 30% of all stores were closed. The Company slowly reopened during the second quarter to provide essential services to the public. At the end of June, less than 10% of stores remained closed and was further reduced to 5% in July.

PSC ended the first half of 2020 with a nation-wide store count of 2,930, 10% more than same period in 2019. There are 2,222 7-Eleven stores in Luzon (1,019 of which are in Metro Manila), 425 in Visayas and 283 in Mindanao. The franchised-stores accounted for 55% of the total, while the remaining 45% are corporate-owned.

The Company is taking advantage of the strength of its balance sheet. Its cash level remains to be above the normal operating requirements and there are still sufficient credit line made available by the major banks to provide additional liquidity if needed.

This shall enable the Company to pursue its corporate strategies as response to the lingering threats brought about by the pandemic. The pivot to more essential products and service offerings is being executed swiftly to respond to the changing needs of the customers. PSC is also accelerating its digital strategy in the areas of e-commerce and payments. 7-Eleven, with is CLiQQ mobile app, remains to be the preferred channel for e-money and bills payment as it recognizes the continued shift towards innovation, convenience and safety.