Shakey’s Q1 earnings down 15% on higher operating expenses

MANILA, Philippines — Higher operating expenses weighed down the first-quarter earnings of the Po family’s listed food service firm Shakey’s Pizza Asia Ventures Inc. by 15 percent to P171 million as it worked to capture demand in a soft market.

Revenues of Shakey’s, the operator of Shakey’s Pizza, Peri-Peri Charcoal Chicken and Potato Corner, inched up by 6 percent to P3.1 billion, its stock exchange filing on Wednesday showed.

Systemwide sales, meanwhile, reached P4.8 billion, up by 15 percent.

Bottom-line growth was tempered by an increase in operating expenses, which surged by 41 percent to P472 million from January to March. The cost of sales likewise rose by 4 percent to P2.3 billion.

Store network expansion

Shakey’s said it had invested more “in the organization and sales generating activities.”

READ: Shakey’s booked P1.08-B profit in 2023

“Anticipating gross margin gains and recognizing the need to deliver value to guests in a soft consumer market, the group invested in topline growth and brand-building activities to better capture demand,” it added.

Earnings before interest, taxes, depreciation, and amortization softened by 10 percent to P412 million.

READ: Singaporean fund exits Shakey’s PH

Shakey’s added 91 stores in the first three months of the year, and by the end of the quarter, it had 2,232 stores in its network.

These are composed of 268 Shakey’s Pizza stores, 1,874 Potato Corner stores, and 76 Peri-Peri stores. R&B Milk Tea and Project Pie have a total of 14 stores.

Shakey’s president and CEO Vicente Gregorio previously said they wanted to further expand their network footprint by building 400 new stores this year.