Philippine Seven (SEVN) Q2 2024 earnings summary

Executive summary

• System-wide sales for H1 2024 reached ₱45.9 billion, up 18.6% year-over-year, with operating revenue at ₱43.3 billion, up 18.4%.

• Net income for H1 2024 was ₱1.76 billion, a 14.0% increase year-over-year; Q2 net income rose 10.3% to ₱1.12 billion.

• Same store sales growth was 7.9% in H1, driven by an 8.7% increase in customer count and net addition of 158 stores.

• Store count reached 4,022 as of September 30, 2024, with 178 new stores opened and 20 closed in H1; target is 4,600 by 2025 and 5,000 by mid-2026.

• A ₱7.3 billion cash dividend was paid in June 2024, reducing equity but reflecting strong cash flow.

Financial highlights

• Operating cash flow for H1 2024 was ₱6.34 billion, up 61.3% year-over-year.

• Q2 revenue from contracts with customers grew 17.9% to ₱22.7 billion; H1 revenue up 18.4% to ₱43.3 billion.

• Q2 operating income rose 10.4% to ₱1.63 billion; H1 operating income up 9.9% to ₱2.56 billion.

• Q2 EBITDA increased 10.3% to ₱2.73 billion; H1 EBITDA up 8.0% to ₱4.65 billion.

• Net store additions in H1 2024 totaled 158, supporting revenue and profit growth.

Outlook and guidance

• Targeting 450 new store openings in 2024, aiming for 4,600 stores by 2025 and 5,000 by mid-2026.

• Focus on expanding outside Metro Manila and enhancing ready-to-eat offerings.

• Management expects net margin to recover in H2, supported by promotions and other income.