Jollibee’s earnings decline 11% to P2B; franchise deal for PHO24 stores terminated

JOLLIBEE Foods Corp. reported a nearly 11% decrease in attributable net income for the first quarter to P2.06 billion from P2.31 billion the previous year despite strong revenue growth.

“Our first quarter financial results reflected continued strong momentum, delivering another quarter of strong top line and operating income growth,” Jollibee President and Chief Executive Officer Ernesto Tanmantiong in a statement on Wednesday.

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

The company’s consolidated revenues for the quarter grew by 28.5% to P55.09 billion from the P42.86 billion recorded in the same quarter last year.

System-wide sales — which measure all sales to consumers, both from company-owned and franchised stores — rose by 31.1% to P78.64 billion from P59.98 billion.

For the Philippines, system-wide sales increased by 36.7% while same-store sales went up by 31.6%. Outside the country, system-wide sales jumped by 23.3%, while same-store sales rose by 8.8%.

As of the end of March, the company has operated 6,542 stores worldwide with 3,281 in the Philippines and 3,261 in its international business.

“We continued to invest in new stores that will help drive sustainable value for our shareholders. We opened 111 stores and grew store network by 4.7% versus prior year. We are on track to achieving our 550-600 new store target for 2023,” Mr. Tanmantiong said.

Operating income for the period ending March, surged to P3.6 billion, up 80.9% from the same quarter the previous year.

NEW BUSINESSESIn a separate disclosure, Jollibee said that the entity behind the PHO24 business had signed agreements to transfer the asset to East-West Restaurant Concepts.

“The franchise agreement for the operation of PHO24 stores in the Philippines was also terminated,” it said, adding that the business operates 14 stores in Vietnam.

SuperFoods Group, which owns Highlands Coffee and PHO24, signed the agreement with the wholly owned subsidiary of Viet Thai International Joint Stock Co. (VTI).

VTI is the partner of Jollibee’s wholly owned subsidiary, JSF Investments Pte. Ltd. (JSF), in the SuperFoods Group.

Jollibee said it will be concentrating its resources on building and growing its new businesses, namely: Tim Ho Wan, Yoshinoya, and Milksha.

It said Tim Ho Wan is targeting to open 100 restaurants within the next few years in China, which it described as one of the group’s “four pillar markets.” It has 16 existing stores in Shanghai and two in Beijing.

Jollibee said its 50-50 joint venture Yoshinoya Jollibee Foods, Inc. plans to open 50 stores in the Philippines in the long term. Japan-based Yoshinoya is a beef bowl business that is recognized globally.

The joint venture is the franchisee of Yoshinoya in the Philippines. It has seven stores in the country.

Jollibee Worldwide Pte. Ltd. has a 51% stake in Milkshop International Co. Ltd., which owns Milksha, a popular Taiwanese bubble tea brand.

The Jollibee group, together with Milkshop’s founder, plans to grow the Milksha brand globally.

On Wednesday, Jollibee shares slipped by 0.62% P1.40 to P223.60 each. — Adrian H. Halili