CP All sheds 5 percent as 7-Eleven earnings plummet

Shares of CP All (CPALL), operator of 7-Eleven convenience stores, fell more than 5 per cent Thursday after announcing a drop in its first-quarter earnings of more than 50 per cent from the same period last year.

CPALL plunged 5.35 per cent to 57.50 baht when trading began before climbing back to 58.50 baht, down 3.70 per cent, as of 11.26 am. It was the most-traded stock during the morning session with 2.33 billion baht of transaction value.

The company reported earnings of the first quarter of 2.59 billion baht late Wednesday, down 54 per cent year-on-year and 27 per cent quarter-on-quarter. The results fell short of the market estimate by 39 per cent.

Lower sales revenue from the convenience stores operation from Covid-19 impact and weak equity income from its TESCO Asia acquisition both contributed to the earnings decline, said Kriengchai Boonpoapichart, the chief financial officer.

CPALL recorded a 17-per-cent drop of sales growth from last year on weak purchasing power, the absence of tourists and its inability to take part in stimulus schemes targeting traditional retail. Average daily customers fell to 845 persons per store each day, down 24 per cent year-on-year.

As a result, analysts at SCB Securities cut CPALL full-year earnings target by 27 per cent in 2021 and expect the second-quarter results to continue to drop amid the ongoing domestic Covid-19 outbreak, with weak equity income and higher interest expenses from refinancing costs from Tesco Asia.

SCB has revised down its CPALL target price to 65 baht from the previous of 80 baht, with a ‘Neutral’ rating.

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