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Jollibee reports 14% fall in earnings to P6B last year

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JOLLIBEE Foods Corp. (JFC) reported a 14.4% drop in earnings in 2019, dragged by a 25.1% decline in operating income.

In a regulatory filing yesterday, the listed restaurant operator said its attributable net income in the full-year 2019 was at P6.33 billion, lower year-on-year despite a 37.1% growth to P1.8 billion in the fourth quarter.

This came amid a 25.1% drop in year-to-date operating income to P5.87 billion, contrasting the 14.9% increase in system-wide retail sales to P243.79 billion, and the 11.4% rise in revenues to P179.64 billion.

For JFC’s fourth-quarter performance, operating income grew 11.6% to P1.81 billion, driven by a 23.2% improvement in system-wide retail sales to P72.72 billion, and a 17.7% increase in revenues to P52.43 billion.

“Practically all brands in the Philippines improved their same store sales growth from (third quarter) to (fourth quarter) led by Jollibee, Red Ribbon, Greenwich and Burger King,” JFC said.

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“Same store sales growth in the Philippines was driven by the continued growth in volume of customer visits in the stores compared to a year ago and strong growth in delivery business for all brands,” it added.

It also noted The Coffee Bean and Tea Leaf (CBTL), which JFC bought last year, contributed 9.4% to the group’s revenue growth for the fourth quarter after adding 1,173 stores to its global network.

“2019 was a very tough year for JFC, but the resilience and determination of our people have kept driving the business forward,” JFC President and Chief Executive Officer Ernesto Tanmantiong was quoted as saying in the statement.

He added the rise in customer visits in its stores, the healthy return on investment from its network, and the strong performance of its delivery business are among the factors JFC is holding on to pull up its earnings moving forward.

It is also looking to keep the recovery pace of its Red Ribbon product supply in the Philippines and its Smashburger business in the United States, which are two of the biggest heavyweights of the company’s earnings in the past quarters.

“We look forward to a much stronger sales and profit performance in 2020 and the years ahead even as we consolidate the financial performance of CBTL into our financial results,” Mr. Tanmantiong said.

JFC was able to open 497 new stores last year, where 273 are located in the Philippines and 224 are abroad. This resulted in an increase of 32.1% in its total store network from in 2018.

Total capital spending last year reached P10.1 billion, which went to the opening of new stores and renovation of existing stores and supply chain facilities.

This year, JFC is targeting to open 600 new stores, where 250-300 will be in the Philippines and 300-350 will be abroad. It is hoping 2020 will also mark the start for its international business segments to generate greater organic store expansion than its Philippine business.

Among the brands JFC controls are Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Cafe, Smashburger and CBTL.

Shares in JFC at the stock exchange lost P3.60 or 1.91% to P185.20 each on Tuesday. — Denise A. Valdez

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