Stock Commentary

MerryMart increases '2030 VISION' annual sales target 25% to P150-B

Merkado Barkada
MerryMart increases '2030 VISION' annual sales target 25% to P150-B

MerryMart [MM 1.02, down 1.0%] [link], the grocery and consumer products chain founded by Injap Sia, said in a press release that it has updated its 2030 VISION goal from P120 billion in annual consolidated systemwide sales revenue to P150 billion. This is a 25% increase from the previous target, and 560% larger than MM’s annualized Q3 consolidated systemwide sales figure (P5.68 billion annualized to P22.7 billion). MM didn’t specify the reasons for increasing the goal but did provide various operational updates that seemed positive, such as hitting 200,000 registered members for MerryMart Wholesale. MM also said that it is nearing completion of its new two-hectare distribution center in Laguna. MM said that its goal is to make the MM Wholesale ECommerce platform available “in all 82 provinces of the Philippines”, with a consumer market coverage goal of 99%.

MB bottom-line: The goal to have 1,200 operating branches feels almost too big to be true given that they’re at 127 right now, and 2030 isn’t that far away. I mean, when they first made the goal back in 2019, 2030 felt like it was a lifetime away. Now, almost two months through 2024 already, 2030 is less than six years away. While we might have some questions about whether MM can build 15 new stores per month, every month, for the next 72 months, the math on the revenue side checks out. Annualized, the 127 MM stores in Q3/23 were doing ?0.18 billion in sales per location per year. If MM maintained that same level of activity in 2030, and if it achieved its goal of building 1,200 stores, that per-store level of performance would equate to ?216 billion in systemwide sales. Will they be able to maintain that level of per-location sales if they 10x the number of stores? I doubt it, but if they even get moderately close, the ?150 billion goal seems achievable. Of course, that depends on their ability to 10x the locations. MM had 103 locations at the end of FY22, so they’re growing at about an 18% pace. That’s not enough. They need to grow their locations by 45% per year, each year, to make it.




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