Jollibee earnings up 17.2% to P2.46 B in H1

MANILA, Philippines - Strong sales in new and existing stores allowed homegrown fastfood giant Jollibee Foods Corp. (JFC) to post significant profit growth in the first semester of the year.

The quickservice restaurant chain is bullish on recording higher full-year earnings despite operational difficulties that prompted the company to close several stores across different brands, its top executive said.

JFC told the local bourse that its net income parent firm improved 17.2 percent to P2.46 billion in the first half from P2.1 billion a year ago. In the second quarter alone, net income rose 14.8 percent to P1.39 billion from P1.21 billion.

“Our drive to bring our brands to higher quality levels through continued product improvement, introduction of new products, more targeted marketing programs and better stores through renovations is sustaining robust sales growth,” said JFC CEO Ernesto Tanmantiong.

Systemwide sales, a measure of all sales to consumers, both from company-owned and franchised stores, increased 14.3 percent to P57.05 billion in the first half and gained 14.1 percent to P29.74 billion in the second quarter.

“The growth was driven by a six-percent increase in store network and an eight-percent same-store sales growth,” JFC said. Same stores refer to restaurants that have been open for at least 15 months.

In particular, the Philippine business recorded a 14.8-percent growth in systemwide sales in the second quarter while the foreign business increased 11.5 percent.

Sales in the US, Southeast Asia and the Middle East, and China recorded 15.3 percent, 26.5 percent and six percent growth, respectively, the fastfood chain said.

In the first semester, JFC opened a total of 108 new stores, of which 84 are in the Philippines and 24 abroad.

“In the next months and years, we will drive for an acceleration of our store opening in the Philippines and abroad, including our businesses in China and Vietnam,” Tanmantiong said.

Regarding the present product availability issues experienced by the JFC Group, Tanmantiong said the company has taken measures to return to normal operations.

“We have also engaged international experts and invested in additional resources to fix the systems upgrade problem at the soonest time possible,” Tanmantiong said.

Constraints in the supply chain and sales order taking due to a new information technology system recently prompted the fastfood giant to close 72 several stores across its different brands.

“We look forward to a sustained growth of the business. Our latest estimate is that, despite the present product distribution issue, JFC will be able to continue to grow sales in the entire second semester of 2014 by the same rate of growth as in the first semester,” Tanmantiong said.