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Jollibee Q2 income jumps 15% amid expansion

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People are seen outside a Jollibee branch at E.Rodriguez, Quezon City, on August 15, 2014. Last week, some Jollibee franchises in Metro Manila were closed due to a delivery problem which they have been experiencing since the beginning of the month.

STRONG sales from its fastfood businesses in the Philippines and abroad helped lift Jollibee Foods Corp.’s (JFC) earnings 15% higher in the second quarter.

In a regulatory filing, JFC said its net income attributable to equity holders of the parent company jumped 15% to P2.25 billion during the April to June period. This brought the first half figure to P4 billion, up 16% year-on-year.

Basic earnings per share for the second quarter rose 14.4% to P2.071 and by 15.1% to P3.728 for the first six months.

System-wide sales, a measure of all sales to consumers from both company-owned and franchised stores, added 27% to P53.93 billion in the second quarter.

For the first half, system-wide sales rose 23% to P99.91 billion, “driven by store network growth, continued strong same store sales growth, the consolidation of Smashburger and impact of currency exchange rate changes.”

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JFC consolidated Smashburger, its US-based burger chain, starting April 17. Excluding Smashburger, system-wide sales increased by 18.1% in the second quarter, and by 19% in the first half.

System-wide sales in all regions were strong during the April to June period, led by the North America business which surged 195.6% due to Smashburger; and Europe, Middle East and Asia (excluding Philippines) which rose by 46%.

The foreign business now accounts for 26.8% of JFC’s global system-wide sales.

“Philippine brands reported a 15.8% growth in system-wide sales compared to the second quarter of 2017 from new stores which added 7.8% and continued strong same store sales, which grew by 8% driven by price adjustments implemented in July 2017 up to June 2018 and more products purchased by customers. JFC also attributes the strong same store sales growth to it continuous product improvement, new product introductions, marketing campaigns and restaurant renovations,” the company said.

JFC’s consolidated revenues, which include sales by company-owned stores, fees from stores operated by franchisees and commissary sales to stores operated by franchisees, increased by 24% to P40.3 billion in the second quarter, and by 21% to P75.1 billion in the first half.

Consolidated cost of sales went up 25% to P33 billion for the second quarter, while increasing 22% to P61.6 billion in the first half.

“In addition, the upward price adjustments implemented by the domestic brands in July 2017 to June 2018 helped mitigate the impact of high raw material prices caused by increase in commodity prices and depreciation of the Philippine peso. As a result, product gross profit margin of the Philippine business decreased only slightly in the second quarter and was flat in the first six months of 2018 compared to the same periods of 2017,” JFC said.

The fastfood giant opened 192 stores, comprising 115 in the Philippines and 77 overseas in the quarter ending June 30. It also closed 63 stores, including 33 in the Philippines, during the same period.

As of end-June, JFC had a total of 4,279 stores, 20% higher compared to the number of stores at the end of June 2017. Smashburger increased the JFC store network by 349 stores or 10%.

Aside from Jollibee, JFC’s brands include Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King in the Philippines. In China, JFC operates Yonghe King, Hong Zhuang Yuan and Dunkin’ Donuts. — CRAG

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