Jollibee expects higher second quarter sales

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) said its sales were likely higher in the second quarter this year amid higher consumer spending boosted by the national elections.

On the sidelines of the company’s annual stockholders’ meeting yesterday, JFC chairman and chief executive Tony Tan Caktiong said the group expects to sustain its growth for the rest of the year, barring any unforeseen circumstances. In the first quarter, it reported an 8.4-percent growth in system-wide retail sales – a measure of all sales to consumers – to P16.3 billion.   

JFC chief financial officer Ysmael Baysa said net profit growth will likely be maintained as margins had been squeezed by higher commodity prices like sugar and dairy products.  

The JFC Group is opening 200 new stores across all its food brands in and outside the Philippines as part of its capital expenditure program, costing about P4 billion.  These new outlets will include a newly-acquired business, Café Ti-Amo, which would bring the group’s total network to 2,082 by end-2010.

Café Ti-Amo, a 50-50 joint venture with local entrepreneur Pamela Tan and her siblings, has already opened two stores – one in SM North Annex and the other in Manila.

Café Ti-Amo is a Korean restaurant brand that offers gelato and coffee in a casual dining format.

Of the P4-billion capex this year, P3 billion will go to the group’s local expansion while the remaining P1 billion will be channeled to the group’s expansion overseas with bulk of it, or P600 million, going to China alone.

Last year, the JFC Group opened a total of 168 stores worldwide – 110 in the Philippines and 58 overseas – compared to 186 the previous year.

In the first quarter, JFC’s net earnings rose 23 percent to P691 million, mainly driven by higher sales and profit margin and lower financing costs. Sales in the Philippines jumped 7.7 percent while sales overseas grew 12.5 percent.

The JFC Group opened a total of 40 stores in the first quarter – 21 in the Philippines and 19 abroad, of which 14 were in China, bringing the total number of stores abroad to 1,904.

Tan Caktiong said the group remains on the lookout for possible acquisitions to spur growth, but there is nothing at the negotiation table at the moment.

JFC runs the country’s largest fast food network under the flagship brand Jollibee, Oriental fastfood chain Chowking, Greenwich, Red Ribbon, Delifrance and Manong Pepe’s. 

Just recently, JFC announced it has taken a 55 percent stake in San Pin Wang, a noodle restaurant chain in China, for $4.4 million. The restaurant operates 34 stores in Nanning and Liuzhou in southern China.