Higher food prices cut into Max’s profit
Leading casual dining chain operator Max’s Group Inc. (MGI) booked a 3-percent year-on-year growth in nine-month net profit to P380.56 million as higher input prices tempered earnings.
System-wide sales for the January to September period grew by 12 percent year-on-year to P11.09 billion, supporting the 11-percent rise in total revenues to P8.09 billion.
“The third quarter is normally our lean period owing to the wet climate and other cyclical factors. Nonetheless, the historical slowdown should reverse ushering into the Christmas season,” MGI president and chief executive Robert Trota disclosed to the Philippine Stock Exchange on Friday.
“We encountered higher commodity prices aligned with inflationary movement. While mitigating measures are in place, we constantly improve our capabilities and menu mix to manage rising input materials,” Trota added.
Restaurant sales increased by 8 percent year-on-year to P6.72 billion, attributed to the opening of 22 new stores in the third quarter alongside steady same-store sales performance. MGI also cited plans to shift to quicker formats for certain brands to benefit from higher volume turnover and lower fixed overhead.
Commissary sales rose by 19 percent year-on-year to P971.03 million in the first nine months while revenues from franchise, royalty and continuing license fees increased by 39 percent to P399.87 million.
In the first nine months, MGI rolled out a total of 55 new stores, including 11 international branches. Overall store count has reached 611 stores, 44 of which are located abroad.
Overseas, MGI has a pipeline of 91 outlets being developed into physical stores. During the third quarter alone, MGI unveiled flagship stores for Yellow Cab Pizza in China and Sizzlin’ Steak in Vietnam.
Trota said MGI expects the economic environment to sustain its positive beat moving into the tail-end of 2016.
“We will open another 20-30 stores to close the year, putting ourselves in a strong position to meet Yuletide demand,” said Trota.
