PETALING JAYA: 7-Eleven Malaysia Holdings Bhd
is expected to see stronger earnings momentum in the coming quarters, particularly in the second half of 2026, as its ongoing expansion and refurbishment strategies begin contributing more meaningfully to performance.
According to CIMB Research, the convenience store operator’s outlook remains supported by continued store expansion, ongoing conversion of classic outlets to the higher-margin Cafe by 7-Eleven format, and a more attractive sales mix.
The research house said in a note to clients last Friday that it expects top-line growth to continue despite the absence of major festive spending periods in the middle quarters of the year.
7-Eleven Malaysia is targeting the addition of 100 new stores in the financial year ending December 2026 (FY26), while also planning 200 refurbishments of existing outlets into the Cafe by 7-Eleven concept.
The research house believes these initiatives could strengthen profitability over time through higher-margin fresh food sales and better operating leverage.
CIMB Research said although expansion activity would likely keep costs elevated, the impact could be cushioned by cost optimisation efforts and a more profitable sales mix, driven by higher-margin fresh food contributions.
The cautiously optimistic outlook came after the retailer posted a weaker first quarter this year (1Q26), weighed down by higher operating expenses and a spike in its effective tax rate.
CIMB Research’s report noted that the group’s 1Q26 core net profit stood at RM6.5mil, representing a 52.3% decrease year-on-year (y-o-y), which fell below expectations.
Revenue for the quarter rose 10.9% to RM837.6mil, but this was offset by a 12.5% increase in operating costs.
CIMB Research said: “The underperformance was primarily driven by higher operating expenses (12.5% y-o-y rise) – mainly staff-related and promotional expenses – and an unexpected spike in effective tax rate to 33.3% during the quarter.”
7-Eleven Malaysia’s earnings before interest, tax, depreciation and amortisation (Ebitda) margin narrowed to 10.6% from 11.8% a year earlier as expenses outpaced sales growth.
Despite the earnings decline, the group continued expanding its footprint across Malaysia, adding 106 net new stores compared with the previous corresponding quarter, bringing its total network to 2,752 outlets.
CIMB Research said the Cafe by 7-Eleven network also expanded significantly, reaching 936 outlets after 344 net additions, which is a 58.1% y-o-y growth.
The research house said revenue growth from new store openings and cafe conversions was partly affected by the earlier timing of the Ramadan fasting period, which is generally considered a slower trading season for convenience retailers.
Promotional spending and labour costs also rose as the company invested in expansion and refurbishment activities.
On a sequential basis, however, 1Q26 showed some improvement compared with the previous quarter. Revenue increased 2% quarter-on-quarter, while core net profit rose sharply by 235.1% from RM1.9mil in 4Q25.
CIMB Research attributed 7-Eleven Malaysia’s rebound to lower operating expenses following heavy year-end operating expenditures in 4Q25 and a lower effective tax rate compared with the previous quarter.
Looking ahead, it forecast 7-Eleven Malaysia’s revenue to increase from RM3.18bil in FY25 to RM3.36bil in FY26.
