Jollibee Q1 profit up 18%

Fast-food giant Jollibee Foods Corp. grew its net profit in the first three months by 17.7 percent year-on-year to P1.4 billion, as election-related spending boosted store sales.

System-wide sales in the first quarter went up by 14.8 percent year-on-year to P34.34 billion, JFC disclosed to the Philippine Stock Exchange on Friday.

JFC is now the largest Asian food service company and is aspiring to be among the world’s five largest in five to seven years.

The increase in retail sales was partly driven by the 8-percent same-store sales growth—referring to stores operating for at least 15 months. Another driver was the expansion in the store network by 6.8 percent.

The Philippine business grew by 16 percent year-on-year, which JFC attributed to product improvement, marketing campaigns, product affordability given the low inflation rate alongside election-related spending, which boosted consumer spending.

The foreign business also reported a 10.5-percent growth in system-wide sales for the quarter.

The US business grew by 17.4 percent while Southeast Asia and Middle East business expanded by 32.2 percent, led by Jollibee Vietnam that grew by 48.2 percent.

The business in China, JFC’s biggest offshore market, grew at a slower rate of 1.9 percent as flagship brand Yonghe King faced sales pressure due to stiff competition.

For 2016, JFC has budgeted P10.4 billion in capital expenditures, more than double the P4.7 billion spending last year.  Some P7.5 billion will be used for new stores and renovation of existing ones while P2.9 billion will be for supply chain investments.

As of end-March, JFC operated 3,143 restaurants worldwide, of which 2,493 are in the Philippines.  JFC also has a 50-percent share in regional joint ventures with a total of 535 stores.