Jollibee Q1 net profit drops 14.7% to P1.53B

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 rose by 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.

Domestic sales grew by 9.5 percent year-on-year, mostly from new stores. Excluding new stores, same-store sales from the Philippines improved by 1.7 percent while worldwide same-store sales increased by 1.9 percent.

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 and Asia businesses growing by 23.5 percent and North American business expanding 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 told the Philippine Stock Exchange.

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, Yonghe King in mainland China, Highlands Coffee in Vietnam (284 stores) and Jollibee. —DORIS DUMLAO-ABADILLA