President Chain Store Corp (PCSC, 統一超商), the nation’s largest convenience store operator, reported financial results for the third quarter in line with market expectations. Shares closed 0.99 percent higher at NT$306 in Taipei trading yesterday.
Net profit for last quarter edged down 0.07 percent to NT$2.772 billion (US$91.2 million) — or earnings per share (EPS) of NT$2.67 — from NT$2.774 billion in the same period last year, the company said in a regulatory filing on Friday.
Operating profit, which offers a better gauge of quarterly performance because it excludes investments, increased 17.44 percent to NT$3.406 billion from NT$3.354 billion a year earlier, an indication that the company’s core convenience store business had solid profit growth.
As of the end of September, PCSC operated 5,579 7-Eleven stores in Taiwan, a net increase of 258 from 5,321 stores a year earlier. That helped drive consolidated sales to increase 4.9 percent to NT$66.09 billion last quarter, from NT$63 billion a year earlier.
PCSC also has investments in drugstore chain Cosmed (康是美), online bookstore Books.com Co (博客來), coffee chain President Starbucks Coffee Corp (統一星巴克), home-delivery service President Transnet Corp (統一速達) and Uni-Ustyle Department Store (統一時代百貨), as well as overseas businesses, including Philippine Seven Corp and 7-Eleven franchises in China’s Shanghai and Zhejiang.
PCSC’s gross margin improved 0.08 percentage points to 34.5 percent last quarter on an annual basis on the back of an improved product mix of snacks, fresh food and freshly brewed coffee, as well as a rise in e-commerce sales.
However, its operating margin decreased 0.83 percentage points to 5.15 percent due to higher expenses from added stores and the impact of new accounting rules, company data showed.
In the first three quarters of this year, net profit increased 4.09 percent year-on-year to NT$8.27 billion, or EPS of NT$7.95, while revenue increased 43.35 percent to NT$191.12 billion. Gross margin and operating margin were 34.39 percent and 5.21 percent respectively.
With an improving outlook for its convenience store business in Taiwan and solid contribution from other investments, Yuanta Securities Investment Consulting Co (元大投顧) yesterday maintained its “buy” rating on the company’s stock with a 12-month target price of NT$343.
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