Jollibee FY22 profit up 33%, boosted by same store sales

Jollibee [JFC 215.00 4.0%] [link] reported a FY22 net income of P7.8 billion, up 33% from its FY21 net income of P5.5 billion. Gross revenue was up 38% to P217 billion. Out of the four global regions that JFC tracks (Philippines, China, North America, and EMEAA), only China registered drops in system-wide sales (-0.2%) and same-store sales (-12.6%), which were due to COVID movement restrictions. 

> System-wide sales up 40%: This is a measure of all sales, to all customers, and counts both old and new stores. JFC registered SWS growth in all regions, except for China, with SWS growth of 44.6% in the Philippines which JFC attributed to significant improvements to dine-in volume. 

> Same-store sales up 27%: This is a measure of all sales from stores that have been operating for at least 15 months. Again, the Philippines led the way in SSS with 40.6% growth. Other regions (except for China) exhibited growth, but not such robust growth as what was reported for the Philippines. The other regions all had COVID movement restrictions lifted much earlier, and so are growing from FY21 with a higher base of dine-in transaction volume.

> Guidance for 2023: JFC said that it projects SWS for FY23 to be up 15% to 20%, with SSS up 7% to 10%, and operating income up 20% to 25%. JFC said that it plans to open 550 to 600 new stores this year, and spend between P17 billion to P19 billion on capex as part of this build-out.

MB-BOTTOM-LINE

I’ve been following JFC very closely since the start of the pandemic, as it operates (for me) as something of a signal for the health and growth of the middle-class and for the normal “operation” of public life. When we all started to get a sense that the lockdowns were not “just going to be for 2 weeks”, JFC and the rest of the quick service restaurants were forced to make some incredible changes to their fundamental business models to stay in business. At the time, they thought that the 80/20 split between dine-in and dine-out would flip, with dine-out being the dominant mode of consumption, and that this flip would become the “new normal”.

Huge amounts of capital were spent on reconfiguring store layouts to accommodate drive-through, pickup, and delivery. It was something of an open question (to me) whether, once things “got back to normal”, JFC and its competitors would give dine-out the cold shoulder and revert to the squish-as-many-people-into-a-physical-store-as-possible model. Here, JFC is providing evidence that the dine-in recovery is very healthy, while at the same time saying that dine-out channels showed “continued resilience”, and that they expect “sustained robust growth” as they “further improve digital touchpoints”. JFC: “Why not both?” 

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