SHAKEY’S PIZZA Asia Ventures, Inc. (SPAVI) grew its net income by 10% in 2018, as new stores helped lift sales amid weak consumer sentiment.

In a statement issued Wednesday, the listed chain of full-service restaurants said unaudited earnings stood at P843 million last year.

System-wide sales, which take into account sales from both company-owned and franchised stores, rose 12% to P9.36 billion, thanks to the opening of 20 new stores in the country. Same-store sales growth stood at four percent, within the firm’s annual three to five percent target.

“The sustainability of our expansion is a commendable feat by all measures. Last year, however, was especially challenging given the headwinds in consumer spending and the continued entry of new competitors in the dining out space,” SPAVI President and Chief Executive Officer Vicente L. Gregorio said in a statement.

Meanwhile, revenues hit P7.58 billion, eight percent higher year on year. The company, however, noted that gross profit posted slower growth at four percent to P2.16 billion, causing a 100-basis-point decline in gross profit margins to 28.5%.

SPAVI attributed the lower margins to higher raw material prices given elevated inflation last year, accompanied by the weaker peso.

“The good news is we saw profit improvements during the last quarter despite compression in our margins for most of the year. Towards yearend, we benefitted from the softening of certain raw material prices, which were then supported by more judicious promotional spending and the operating leverage brought about by seasonality,” Mr. Gregorio said.

SPAVI remains upbeat for its business prospects this year, as it plans to open 20 new stores in the Philippines, which will bring its year-end store count to 248. It also has at least 20 outlets in the pipeline for overseas expansion, since it holds the perpetual rights to the Shakey’s brand in the Middle East, Asia excluding Japan and Malaysia, China, Australia, and Oceania.

The company has recently added a new brand to its portfolio following the acquisition of Peri-Peri Charcoal Chicken from iFoods Group, Inc. The fast casual restaurant chain has 23 outlets, 60% of which are franchised while 40% are company-owned.

“We are excited about 2019 amidst today’s dynamic restaurant landscape. In this environment, we will intensify further our efforts to improve the effectiveness and efficiency of our operations, focusing primarily on superior execution this year,” Mr. Gregorio said.

Shares in SPAVI jumped 4.61% or 56 centavos to close at P12.70 each at the stock exchange on Wednesday. — Arra B. Francia