Jollibee reports lower earnings in Q1

MANILA, Philippines — Homegrown fast food giant Jollibee Foods Corp. reported lower earnings in the first quarter, although the figures were distorted by gains from last year’s sale of some of the company’s land properties.

Net income in the first three months of the year amounted to P2.06 billion, down 10.6% year-on-year, Jollibee said in a disclosure to the stock exchange Wednesday.

Profits fell because it was compared to figures recorded in the first quarter of last year, when Jollibee reported an extraordinary gain of P1.8 billion from land conveyance and sale of other properties.

But excluding the impact of that one-time gain, the company said net income in the first quarter would have grown at an annualized rate of 331.9% — a figure that was nevertheless magnified by softer sales early last year when the Omicron wave weighed on Jollibee’s business.

Overall, Jollibee “delivered strong operating profit growth despite continued macro challenges,” Ernesto Tanmantiong, company chief executive, said in a statement.

“We remain focused on navigating through these uncertainties and are confident in our ability to deliver another year of strong growth,” he added.

Financial results showed system wide sales from all of Jollibee's stores and brands at home and abroad jumped 31.1% year-on-year to P78.6 billion in the January-March period. In the Philippines alone, sales grew by 31.6% on-year.

This sent the company’s top-line to P55.09 billion, up 28.5% year-on-year.

When the pandemic struck and sapped store sales, Jollibee activated a P7-billion "business transformation program" that saw 486 underperforming stores permanently shut while company resources have been diverted to enhancing delivery systems that boomed amid the health crisis.

But even before the pandemic hit, the Jollibee Group's earnings had been slowly dwindling after failing to swiftly turn to profits two loss-making foreign brands it acquired.

Richard Shin, company chief financial officer, said Jollibee remains “focused on continued improvement in our business fundamental”.

“We are confident in our ability to execute our strategies and deliver our financial goals for 2023,” he added.

Shares in Jollibee ended the morning trade down 0.62% to P223.60 apiece.