Corporate News

Higher systemwide sales lift Max’s Q1 net income

Posted on May 10, 2017

MAX’S Group, Inc. (MGI) on Tuesday said earnings grew by 8% in the first three months of the year, as an increase in systemwide sales offset higher input prices and distribution expenses.

In a statement, MGI said it booked a net income of P175.98 million in the January to March period, from P162.32 million during the same period in 2016, on the back of a 10% rise in systemwide sales to P3.93 billion. Revenues, meanwhile, grew 9% to P2.91 billion.

“We are off to a relatively solid start for the year notwithstanding the challenging commodity pricing situation. While we expect to encounter some more of these headwinds, we will continue to push forward with our strategies,” MGI President and Chief Executive Officer Robert F. Trota said in a statement.

The company benefited from its aggressive expansion plan as restaurant sales grew 4% to P2.42 billion. MGI opened 18 new stores in the first quarter with three abroad, namely the Yellow Cab Pizza in Qatar and Hawaii and Max’s Restaurant in San Diego, California.

Revenues from new franchises, royalty and continuing license fees increased by 34% to P180.12 million, due to a larger recurring income base, while commissary sales was up by 40% to P311.44 million with the addition of more franchised outlets.

MGI ended the quarter with a total of 632 outlets, 51 of which are located abroad. This year, the company will be spending P600 million to P700 million to roll out 60 to 70 new stores to hit its target of 1000 new stores by 2020.

The firm has already secured a development agreement overseas for the establishment of 10 Yellow Cab Pizza stores in Brunei and five Yellow Cab Pizza stores in East Malaysia over the next five years.

“Our objective is to bulk up and at the same time operationalize our existing pipeline,” stated Mr. Peter H. King, Max’s Group International Chief Executive Officer was quoted as saying in a statement. -- Arra B. Francia