KUALA LUMPUR (May 21): Convenience store chain operator 7-Eleven Malaysia Holdings Bhd (KL:SEM)’s first-quarter net profit more than halved to RM4.72 million from RM10.63 million a year ago, as it incurred higher costs due to business expansion that offset the revenue growth seen from its new store openings.

Operating expenses for its convenience store business during the quarter ended March 31, 2026 (1QFY2026) grew by RM20.2 million or 8.2% from a year ago, its Thursday bourse filing showed.

This was because of higher store operation-related expenses driven by the net addition of 106 new stores — bringing the total number of stores to 2,752 — the expansion of its workforce, and higher promotion activities to support its expansion efforts.

As at end-March this year, the group operated 936 CAFé by 7-Eleven outlets, as its CAFé count grew by 344 from 1QFY2025. "It is encouraging to note that these CAFé by 7-Eleven have proven to be more productive with improved fresh food product and coffee offerings compared to classic stores," 7-Eleven said.

Revenue for 1QFY2026 grew 10.9% to RM837.58 million from RM755.28 million in 1QFY2025, driven by the store additions and higher average sales per day, supported by public holidays during the quarter. Convenience stores contributed RM835.3 million or 99.7% of its total revenue, up from RM755.3 million previously.

Its Indonesian pharmaceutical operation, meanwhile, contributed RM2.3 million revenue to the group total from the distribution of pharmaceutical products across 14 outlets. But the operation remained in the red with a loss after tax of RM1.2 million, due to the lack of scale.

No dividend was declared during the quarter.

The group said its convenience store operations remain in expansionary phase, and operating expenses are elevated by continued investment in staffing and infrastructure to support its fresh food sales growth.

In the meantime, management is sharpening store-level efficiencies, refining the fresh food mix, and strengthening supply chain capabilities. "By leveraging its extensive market footprint and digital loyalty ecosystem to drive higher transaction values and basket sizes, the group aims to enhance overall store profitability and bridge the gap between near-term overheads and long-term sustainable growth," it said.

On outlook for 2026, it remains cautiously optimistic, supported by anticipated higher tourist arrivals under Visit Malaysia Year 2026 and improved household disposable income following civil service salary adjustments. Nevertheless, it acknowledged the headwinds, including the impact of subsidy rationalisation on consumer purchasing power and persistent global oil price volatility.

Its Indonesia pharmaceutical operations, meanwhile, are performing "within expectation". It plans to open several new outlets with a revised store layout to explore commercial viability, besides improving its product mix and pricing strategy.

7-Eleven’s shares were not traded on Thursday. It last closed at RM1.98, valuing the group at RM2.32 billion.