Jollibee Foods to triple earnings in five years

MANILA, Philippines — Fast food tycoon Tony Tan Caktiong’s Jollibee Foods Corp. is setting an ambitious goal to triple profits to over P26 billion in five years as it raises bets on coffee, tea and the China market to drive growth.

This comes amid a banner year for sales in 2023, helping the owner and operator of chains such as Jollibee, Mang Inasal and The Coffee Bean and Tea Leaf (CBTL) post robust earnings amid inflationary pressures.

Total revenues in 2023 rose 15.2 percent to a record P244.1billion while systemwide sales hit P343.32 billion, an increase of 16.3 percent and an all-time high for the fast food giant, a stock exchange filing showed on Tuesday.

Strong sales coupled with strict cost controls pushed up net income in the past year by 16 percent to P8.8 billion.

Jollibee CEO Ernesto Tanmantiong cited bullish prospects for the group in the long-term.

“Our strategies combined with a portfolio of strong and valuable brands and the support of our talented global team give me the confidence that we will be able to achieve our goal to triple our value (in terms of net income attributable to equity holders of the parent company) in five years, Tanmantiong said in a statement.

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Jollibee ended the year with 6,885 stores after opening 658 new outlets—an increase of 6.3 percent and above initial projections to open 500-600 new branches.

Target: 700-750 outlets

In the coming year, Jollibee will open 700-750 new company-owned and franchised outlets, supported by a capital spending budget of P20 billion to P23 billion, the filing showed.

Systemwide sales this year will grow by 10-14 percent while same store sales will increase by 5-7 percent, the company said. Operating profit growth will be in the range of 10-15 percent, it added.

Jollibee aims to support growth by doubling down on “four big” areas: international growth, coffee and tea, expansion in secondary cities in China, and boosting its domestic market leadership.

“We will ramp up franchising to support our global expansion,” Tanmantiong said.

READ: The Jollibee story: Lessons on leadership

“We will also accelerate our digital transformation and bring capabilities on-par with global quick service restaurant leaders to increase operational efficiency and further improve customer experience and revenue management,” he added.

Jollibee said Philippines-based stores contributed 61 percent of total sales while the remainder came from its international presence. Domestic sales grew 17.6 percent while overseas stores grew by 14.4 percent.

Jollibee has 1,660 stores, followed by CBTL (1,164), Highlands Coffee (779), Chowking (613), and Mang Inasal (573). Other domestic and international brands in its portfolio include Red Ribbon, Greenwich, Burger King, Panda Express, Smash Burger and the recently opened Tiong Bahru Bakery.

Growth strategy

Jollibee chief financial officer Richard Shin described 2023 as a “another remarkable year” for the group.

“[O]ur strong execution drove sales and operating profit growth at the higher end of our guidance. We generated significant cash flow putting us in an excellent position to execute our growth strategy for 2024,” Shin said.

“While we continue to open new stores this year, we remain focused on managing elements within our control, including driving top line through omni channels, effective cost management and operational efficiency. This gives us the confidence that we will continue to deliver revenue and profit growth, as well as margin and operating cash flow expansion in 2024,” he added.