JOLLIBEE Foods Corp. (JFC) registered a net income of P2.31 billion attributable to parent firm equity holders, a big jump from its P152.6-million profit a year earlier, in part as the food service company booked gains from a property sale.
Ernesto Tanmantiong, JFC chief executive officer, said the group’s performance during the period “set new record for sales for a first quarter” despite the challenges posed by the Omicron virus variant’s surge and the higher prices of raw materials and energy,
In a disclosure on Thursday, JFC said its net income for the quarter included gains from the transfer of certain land properties of the group to CentralHub Industrial Centers, Inc. and the sale of other properties amounting to P1.8 billion.
The property deals are part of the listed company’s plan to invest in CentralHub, a company in the industrial real estate business.
During the quarter, system-wide sales, which measure all sales to consumers from company-owned and franchised stores, jumped by 25.5% to P59.98 billion, propelled by robust same-store sales growth of 16.5% and global store network expansion and acquisition, which contributed 5.5%. Currency translation added 3.5% to the growth, JFC said.
Mr. Tanmantiong said system-wide sales of businesses in China, North America, EMEAA (Europe, Middle East, Africa and Asia), including SuperFoods, had reached pre-pandemic levels, fueled by continued store expansion.
He said the store network of JFC’s foreign business for the first quarter surged by 20.3% organically or excluding acquisitions compared with the pre-pandemic first quarter of 2019, “in line with our long-term growth model.”
“Sales of our Philippine business were still below pre-pandemic levels, but are showing sustained strong growth for off-premise sales which grew by 57% compared to the first quarter of 2019, offsetting the decline in dine-in sales,” Mr. Tanmantiong said.
He said delivery sales accounted for around 20% of the Philippine business’ system-wide sales and had grown five-fold since 2019.
“In terms of operating profit, the Philippine business performed better compared to the first quarter of 2019 despite a decline in revenues and rising inflation,” he said, citing JFC’s business transformation program and continuing cost and profit management.
First-quarter system-wide sales included sales of Milksha, a popular Taiwanese bubble tea brand. JFC subsidiary Jollibee Worldwide, Pte. Ltd. completed the acquisition of a 51% stake in Milkshop International Co. Ltd., the company that owns Milksha on Feb. 22. JFC said the consolidation of Milkshop did not have a significant impact on the group’s sales and profit for the first quarter.
Quarterly global same-store sales increased by 16.5%, led by The Coffee Bean and Tea Leaf, which grew by 23.3%, the Philippine business by 22.9%, North America by 8.1% and EMEAA by 6.2%. JFC said the China business’ same-store sales decreased by 9.1% because of heightened pandemic-related restrictions.
Operating income climbed by 33.8% to P1.99 billion, backed by the faster profit growth in the Philippines. Gross profit margin was “slightly below” year-ago level due to rising inflation rate and higher freight charges, JFC said.
In 2021 and the first quarter of 2022, JFC implemented price adjustments and continued with internal cost efficiencies to support profit margins.
The company said that compared with pre-pandemic levels, first-quarter system-wide sales and revenues were already ahead by 10.5% and 6.2%, respectively. Operating income was lower by 5.2% while attributable net income was higher by 58%.
On Thursday, JFC shares declined by 0.09% or 20 centavos to close at P217 each. — Victor V. Saulon