Jollibee nets P4.4B

Fast-food giant Jollibee Foods Corp. saw a 13.8-percent growth in nine-month net profit attributable to parent equity holders to P4.39 billion on higher sales from existing and new restaurant outlets.

For the third quarter alone, attributable net profit rose by 6.1 percent year-on-year to P1.33 billion.

Jollibee, the largest Asian food company, grew its system-wide sales in the third quarter by 12.4 percent year-on-year to P36.32 billion, bringing the nine-month sales to P107.76 billion or 14.1 percent higher year-on-year.

On a worldwide basis, sales from the same store network grew by 6 percent year-on-year while new stores contributed a growth of 6.4 percent.

Sales from the Philippine market alone rose by 16 percent year-on-year while overseas business expanded by 6.8 percent year-on-year for the nine-month period.

“Sales of our businesses continued to be strong. We expect to end the year 2016 with the highest system wide sales growth in five years and the highest organic growth in at least a decade driven by strong same store sales growth and the highest store network expansion,” Jollibee chief executive officer Ernesto Tanmantiong said in a press statement on Tuesday.

For the third quarter, Tanmantiong said the growth from foreign businesses had improved versus previous quarters, including China.

“We look forward to continued recovery of our China business in the months ahead with the introduction of new products. Our plans for 2017 and the years ahead call for continued strong same store sales growth and store network expansion in the Philippines and abroad with the aim of surpassing our historical performance. We have to invest heavily, however, in increasing our organization and supply chain capability in the Philippines and abroad as a means of achieving our goal,” he said.

JFC opened 201 new stores in the first nine months of 2016 consisting of 133 in the Philippines and 68 abroad. This year’s expansion is thus more aggressive compared with the opening of 186 new stores worldwide in the same period last year.

Jollibee chief financial officer Ysmael Baysa said gross profit margins on the company’s products improved in the third quarter of 2016 versus year ago as raw material prices continued to be stable.

“Our store operating expenses, however, rose significantly due to increase in average headcount per store in the Philippines. This was necessary to ensure that we maintain and further improve the quality of our services and food in the restaurants even as the volume of sales per store continued to rise significantly particularly in the last two years,” he said.

The cost of Jollibee’s general and administrative expenses rose by 17.1 percent, which was higher than the increase in revenues of 11 percent as the group invested in technology, network development organization, market research, training for field personnel and formerger and acquisition projects, Baysa said.

“We expect the growth of these expenses to be lower in the fourth quarter of 2016 and for the full year of 2017 relative to the growth in 2015 and in the first nine months of 2016 as we go past the peak of our investment spending in increasing systems capability. On marketing expenses, we expect them to grow in line with sales. We look forward to the recovery of our profit growth in the months ahead,” he added.

Jollibee operates the largest food service network in the Philippines. As of end-September, it was operating 3,221 stores worldwide, of which 2,547 outlets are in the Philippines. It also has a 50 percent interest in joint ventures for the following stores: Highlands Coffee (Vietnam, Philippines) 147, Pho 24 (Vietnam, Indonesia, Cambodia, Korea and Australia) 33, 12 Hotpot (China) 16, others 8; and a 40 percent interest in Smashburger that had 376 outlets, mostly in the United States. These joint ventures had a total of 580 stores worldwide, which were not included in the consolidated store count.