Homegrown fast-food giant Jollibee Foods Corp. (JFC) grew its first semester net profit by 5.4 percent year-on-year to P2.6 billion amid an unprecedented store expansion program that recently breached the 3,000-branch network globally.
For the second quarter alone, net profit rose by 1.6 percent year-on-year to P1.41 billion, JFC disclosed to the Philippine Stock Exchange on Friday.
The company attributed the flat growth in the second quarter to higher raw material prices as well as major investment spending on information technology. Jollibee recently migrated its supply management system from software firm Oracle to rival, SAP, due to inventory issues.
Six-month revenues went up by 9.5 percent as the group boosted its network to 3,000 branches worldwide by opening 131 new stores, of which 102 were in the Philippines.
“We are excited about our recent rate of store network expansion. We just achieved the 3,000th store milestone. We are on track to open at least 200 new stores in one year in the Philippines, the first time we will be able to do so. Historically, we were opening a hundred new stores per year in the country. We look forward to opening 300 new stores worldwide this year, also a first in our history with 100 abroad, the bulk of which will be in the People’s Republic of China,” JFC chief executive Ernesto Tanmantiong said in a press statement.
He said JFC would be looking forward to a double-digit sales growth in the years ahead.
“The key drivers of our store network growth are strong same-store sales growth and improved profitability and financial returns of our stores, built over the past two years across the brands and across different regions in the world, and increased capability of our organization particularly our network development group in the Philippines,” he said.
System-wide sales rose by 8.9 percent year-on-year to P62.15 billion in the first semester. For the second quarter alone, sales grew by 8.4 percent to P32.25 billion.
JFC chief financial officer Ysmael Baysa said increased inventories affected profit margins but, “We deliberately increased our inventories in the Philippines starting in 2014 as a safety measure during a major new system implementation, and as a way of dealing with the logistics and delivery challenges in the country.” Doris Dumlao-Abadilla