The COVID-19 pandemic has had a limited impact on Taiwan FamilyMart Co (全家便利商店), as the convenience store operator’s main business is in Taiwan and its earnings contribution from China is less than 3 percent, analysts said last week.
As the worst has passed for the company in terms of coronavirus impact in Taiwan and China, earnings per share are likely to rise to another record high this year, thanks to its aggressive store opening strategy and increased contribution from high-margin fresh foods and e-commerce, analysts said.
FamilyMart operates the nation’s No. 2 convenience store chain, with 3,606 stores nationwide as of Feb. 29, the company said on its Web site.
In China, it operates more than 1,200 stores in nine cities.
In the first two months of this year, combined revenue grew 8.9 percent year-on-year to NT$13.09 billion (US$431.9 million), which reached 65.7 percent of Taishin Securities Investment Advisory Co’s (台新投顧) first-quarter revenue estimate on the back of a higher number of stores, and increased e-commerce sales and fresh food sales.
As the outbreak has been relatively under control in Taiwan, FamilyMart has seen a gradual recovery in customer traffic by the end of last month, as well as improved single-store sales (SSS), in the first quarter, Taishin Securities said in a note on Wednesday.
Its number of closed stores in China also dropped to 100 last month, compared with 600 at the beginning of February due to citywide lockdowns and travel restrictions amid the COVID-19 outbreak there, Taishin said.
The company’s overall operation in China is likely to return to normal in July, it added.
FamilyMart’s revenue in the first quarter is expected to increase 8.4 percent year-on-year to NT$19.71 billion, with earnings per share of NT$0.93, Taishin said.
FamilyMart, which aims to add another 220 to 230 stores in Taiwan this year, on March 25 reported net income of NT$1.83 billion for last year, up 13.39 percent from the previous year, with record-high earnings per share of NT$8.2.
Revenue increased 8.38 percent annually to NT$77.73 billion last year, driven mainly by the opening of 222 new stores and SSS growth of 2 percent as the company continues to focus on fresh food sales and its membership program.
Yuanta Securities Investment Consulting Co (元大投顧) expects the company’s revenue to grow 9.9 percent this year to NT$85.4 billion on the back of its persistent store expansion and SSS growth of up to 3 percent.
Earnings per share would likely increase 10.4 percent to NT$9.05 this year, Yuanta said in a note on Monday last week.
FamilyMart’s share price has fallen 4.58 percent this year to date in Taipei trading, compared with the broader market’s 19.45 percent decline.
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