Shakey’s Pizza Asia Ventures, Inc. (SPAVI) said its net profit rose in the second quarter, reflecting the impact of its store network expansion.
It said in a regulatory filing that net profit rose 8% year-on-year in the second quarter, to P229.37 million.
Revenue in the three-month period increased 4.8% to P2.01 billion, outpacing the 3.2% increase in cost of sales to P1.41 billion.
For the first half, net profit was P417.75 million, up 5.5% from a year earlier.
Revenue grew 4.4% to P3.85 billion, after system-wide sales rose 7.7% to P4.96 billion.
System-wide sales are the combined sales of company-owned and franchise stores of SPAVI. The company said its growth in the first half was driven by the consolidation of Peri-Peri Charcoal Chicken within the company in June and the 29 new stores it opened nationwide.
Same-store sales growth (SSSG), which filter out the impact of store additions, grew 5% to P5 billion during the period.
“Earnings performance can be attributed to the company’s ongoing store network expansion and improved margins brought about by lower input costs and enhanced operating efficiencies both at the store and corporate level,” the company said in a regulatory filing.
Expenses of SPAVI increased 4.3% to P2.74 billion in the six-month period from P2.63 billion a year ago.
“We are pleased to see sales pick up and SSSG revert to positive territory in the second quarter. We look forward to increasing contributions from new stores, with the opening of at least 15 more outlets in the Philippines during the second half of 2019,” SPAVI President and Chief Executive Officer Vicente P. Gregorio said in a statement.
He noted, however, that the company may not hit its goal of 3-5% SSSG at the end of the year because of increased competition in the restaurant market.
He said the company hopes to keep its earnings up, maintaining its target of double-digit growth in recurring net profit by year’s end, through the company’s “efficiency-enhancing and cost reduction initiatives.”
“Margins in the second quarter already show some of the results from these measures, and we will continue to intensify our efforts in this area,” Mr. Gregorio said.
“We will continue to invest in our brand and our people to better take advantage of the existing opportunity. We will also maintain our store expansion strategy, which now includes both Shakey’s and Peri-Peri, local and international as well,” he added. — Denise A. Valdez