MANILA, Philippines — Homegrown fast-food giant Jollibee Foods Corp. (JFC) saw a 14.7-percent drop in attributable first quarter net profit to P1.53 billion, weighed down by losses incurred by American subsidiary Smashburger.
JFC’s systemwide sales by rose 18.1 percent year-on-year to P54.28 billion in the first three months, while revenues grew by 14.1 percent to P40.35 billion for the same period.
First quarter operating income, however, fell by 10.2 percent due to Smashburger’s losses. Excluding the American hamburger chain — which was consolidated into its books starting April 2018 when JFC assumed 85 percent control — operating income would have expanded by 9.1 percent.
Profit from the Philippines, which accounted for 73 percent of worldwide sales, grew by 11.1 percent year-on-year during the first quarter.
Three-month sales in China declined by 6.2 percent year-on-year due to the slower growth of the delivery business and the adverse impact of foreign currency changes. Excluding Smashburger, first quarter sales from the foreign business grew by 9.7 percent year-on-year, with Europe, Middle East and Asia businesses growing by 23.5 percent and North American business growing by 21.9 percent. Including Smashburger, business in North America grew by 207.4 percent for the period.
“We look forward to continued growth in 2019 with the opening of about 500 new stores and capital investments of P17.2 billion,” JFC chief financial officer Ysmael Baysa said in a disclosure to the Philippine Stock Exchange on Wednesday.
“Our financial performance in 2019 by quarter, however, will be mixed. Our sales and profit performance in the first and second quarters will not be as strong as in previous years. Same-store sales growth of our brands in the Philippines in the first half will not be as strong as last year’s,” he explained.
Baysa said JFC was looking forward to sales and profit recovery in the third and fourth quarters as consumers in the Philippines regain purchasing power after the lagged effect of the high-inflation environment in 2018.
“More importantly, we look forward to at least sustaining our historical sales and profit growth rates over the medium term, both in the Philippines and abroad, and transforming Smashburger into a much stronger business, as we had done with practically all our acquired businesses.”
As of end-March, JFC operated 4,543 stores worldwide, of which 3,141 were in the Philippines. Its local brands consisted of Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, and Pho24. Outside the Philippines, JFC’s biggest brands are: Smashburger in the US (with 348 stores), Yonghe King in mainland China (with 322 stores), Highlands Coffee in Vietnam (284 stores) and Jollibee (with 234 stores) across various markets). (Editor: Eden Estopace)