Despite slow start, Shakey’s keeps 2019 targets

Restaurant operator Shakey’s Pizza Asia Ventures Inc. grew net profit in the first semester by 5 percent year-on-year to P418 million as the opening of new stores boosted sales while margins improved with muted input costs.

Tough competition, which resulted in slower-than-expected same store sales growth, tempered the food retailer’s first semester profits but it hoped to grow at a faster pace for the rest of the year.

“Despite a slower start, we are maintaining our goal of increasing recurring net income by double-digits this year and extending to 2019 our 15-year streak of growing earnings by double-digits. We will remain focused on strengthened execution across dine-in and delivery, as well as on the expansion of our network of stores. We will also pursue further cost improvement and margin-enhancing measures to help shore up profitability and create increased value for our guests,” Shakey’s president Vicente Gregorio said in a disclosure to the Philippine Stock Exchange.

Systemwide sales, a measure of revenues generated by company-owned and franchised stores, grew by 8 percent year-on-year in the first half to P5 billion, driven mainly by new store openings and the acquisition of 23-store Peri-Peri Charcoal Chicken.

“We are pleased to see sales pick up and SSSG revert back to positive territory in the second quarter. We look forward to increasing contributions from new stores, with the opening of at least 15 more outlets in the Philippines during the second half of 2019. We’ve consolidated Peri-Peri beginning June 1 and though still relatively small to total, we remain very excited about its prospects,” Gregorio said.

“We are, however, still challenged by continued competition in the restaurant space and the promotion-heavy initiatives of various industry players. We will likely miss our target SSSG of 3 to 5 percent for this year, but remain positive that we can make up for it via margin expansion and bottom-line improvements with the efficiency-enhancing and cost-reduction initiatives in place. Margins in the second quarter already showed some of the results from these measures, and we would continue to intensify our efforts in this area,” he added. —DORIS DUMLAO-ABADILLA