The country’s leading pizza parlor chain operator Shakey’s Pizza Asia Ventures grew its first-quarter net profit by 6.4 percent year-on-year to P184 million even as higher input costs tempered the impact of a double-digit growth in sales.
Shakey’s grew its first-quarter systemwide sales—a measure of total sales for both company-owned and franchised stores—by 10 percent year-on-year to P2.2 billion. This was mainly attributed to a 2-percent growth in same-store sales and a continued store network expansion strategy.
Meanwhile, the company noted that earnings growth had been curbed by cost pressures relative to the year before.
“We are pleased to have achieved a double-digit sales growth for the first quarter of 2018 despite what is typically a seasonally weak quarter and a high base last year,” Shakey’s president and chief executive Vicente Gregorio said in a press statement on Friday.
“We continue to face a competitive environment, but this has been mitigated by the success of our own marketing initiatives and the efforts we have made to improve the overall Shakey’s brand experience. We look forward to positive momentum from here and expect improvements as we move to complete the year,” he added.
For the three months ending March, the company grew total revenues by 6 percent year-on-year to P1.8 billion. Cash flow as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) grew by 5 percent year-on-year to P344 million.
During the quarter, Shakey’s opened four new outlets bringing its nationwide store count to 212.
“We continue to implement efficiency measures to cushion the impact of higher costs and inflationary pressures. Moreover, with the expected pickup in sales moving forward, we will likewise see an uptick in our margins as we maximize operating leverage and spread out fixed costs,” Gregorio said.
During the first quarter, Shakey’s maintained industry-leading margins of 29 percent and 19 percent for gross profit and Ebitda, respectively. Pizza’s return on equity held steady at 20 percent.
For balance of the year, Shakey’s intends to open another 16 new branches with construction of several new stores already underway. With this, it remains well on track to bringing its total Philippine store network to 228 by year-end.
Gregorio said: “We are further expanding our reach as we bring the Shakey’s experience to more and more locations beyond Metro Manila. The bulk of the 20 new stores we are opening this year are outside the first-tier cities where urbanization and incomes continue to rise.”
Shakey’s likewise expects an increase in same-store sales growth for the rest of 2018, targeting a full-year range of between 3 and 5 percent. —DORIS DUMLAO-ABADILLA