Robinsons Supermarket And Drugstore Stocks Stay Strong Despite The COVID-19 Pandemic
Essential services stocks remain resilient.
While a number of industries have been hit hard by the pandemic, namely airlines and tourism, one industry has stayed strong: supermarkets and drugstores. Deemed essential, JG Summit's Robinsons Retail Holdings, Inc.'s (RRHI) supermarket and drugstore brands have managed to stay resilient despite the economic effects of the pandemic.
RRHI's first-quarter income grew by 44.9 percent to P923 million, beating financial analyst estimates that predicted 19.4 percent to 22 percent growth for the whole year. Sales are also up by 7.4 percent to P40.1 billion, buoyed by supermarket sales, which increased by 17.7 percent, and drugstore sales, which increased by 13.1 percent.
"The outperformance was mainly driven by the robust performance of supermarkets and drugstores, as these formats benefitted from a surge in demand following the enhanced community quarantine," said COL Financial in its latest stock report.
The first quarter of 2020 has seen a growing demand for RHHI as citizens rushed to purchase food and medicine, first as donations for the Taal Volcano eruption in January, and then as food stocks when quarantine began in March.
Supermarkets and drugstores are not the only brands under RRHI, but the combined income from supermarkets and drugstores was enough to make up for RHHI's department store, DIY store, convenience store, and specialty store sales-all of which declined.
Operational cost savings also aided RRHI's first-quarter performance as it obtained a rental reprieve, which "tempered the impact of the lower sales due to temporary store closures for non-discretionary stores," said COL Financial.
"We continue to like RRHI given its well-diversified portfolio of retail formats," said COL Financial. "Furthermore, it has allowed the company to be relatively resilient in this challenging time with COVID-19 due to its exposure to staple retail formats apart from its discretionary stores."
While essential services like supermarkets and drugstores are faring well, airlines like JG Summit's own Cebu Pacific have been grounded due to travel restrictions, causing Cebu's net loss to balloon to P1.2 billion.
Esquire Philippines and Yummy.ph are both published by Summit Media, a company owned and managed by the Gokongwei family, who also controls JG Summit Holdings.
This story originally appeared on Esquiremag.ph.
* Minor edits have been made by the Yummy.ph editors.