Jollibee earnings decline yet again
Homegrown fastfood giant Jollibee Foods Corp. (JFC) reported a severe drop in earnings in the second quarter as it continued to grapple with problems that bedeviled it in the past few quarters.
JFC saw its net income plunge 50.2% to P1.1 billion in April to June, largely due to losses from American hamburger chain Smashburger and lower sales of Red Ribbon.
Sales of Red Ribbon were affected by product supply shortage as it transferred its main production facility to a new commissary in the southern portion of Metro Manila.
This brought JFC’s first half profit to P2.66 billion, down 34.4% . Systemwide sales, on the other hand, grew 13.8 to P113.7 billion as same-store sales growth continued to improve. Sales from international businesses expanded by 25% with Europe, Middle East and Asia growing 20.9% and North America by 11.3%. The Philippine business, on the other hand, grew 10.2 %.
JFC chief finance officer Ysmael Baysa said the profit challenges are short-term and that costs would be at a much lower level starting 2020.
Baysa said JFCintroduced major changes to accelerate Smashburger’s sales and profit growth. These include reduction of prices to replace temporary discounts, major product, opening of stores in good locations and strengthening its leadership team.
Baysa also cited the significant contributions that would come from Coffee Bean and Tea Leaf, when fully integrated into JFC, within 12-18 months.
JFC ended the first semester with a total of 4,613 stores worldwide, of which 3,195 restaurant outlets are located in the Philippines: Jollibee 1,163, Chowking 590, Greenwich 284, Red Ribbon 479, Mang Inasal 577, Burger King 101 and PHO24 1.
Overseas, the group was operating 1,418 stores: Yonghe King (China) 323, Hong Zhuang Yuan (China) 45, Dunkin’ Donuts (China) 9, Jollibee 238 (Vietnam 118, Brunei 17, Hong Kong 8, Singapore 7, Macau 1, Malaysia 1, United States 37, Canada 4, Saudi Arabia 13, UAE 14, Qatar 7, Kuwait 6, Bahrain 1, Oman 1, Italy 1, United Kingdom 1, and Guam 1), Red Ribbon in the US 31, Chowking 47 (US 15, UAE 21, Qatar 4, Oman 2, Kuwait 3, and Saudi Arabia 2), Highlands Coffee 340 (Vietnam 297, and Philippines 43), PHO24 34 (Vietnam 18, Indonesia 16), Hard Rock Cafe 6 (Vietnam 2, Hong Kong 3, and Macau 1); and, Smashburger 345.