JFC Holdings Corp., which controls the Jollibee fast food chain, said it hopes to achieve a 50/50 mix between foreign and domestic store revenue in five to seven years, noting that growth rates are stronger at its overseas locations.
“Overall, if you look at our financial statements in many years, interestingly, the changes in foreign exchange rate has benefitted us and one of the reasons is precisely because we are diversified,” JFC Chief Financial Officer Ysmael V. Baysa told reporters Friday on the sidelines of the company’s annual shareholder meeting in Ortigas district.
At present, revenue derived from foreign stores account for 20% of the company’s overall revenue.
“That’s why our goal is to make increase it to 50/50. I think, because foreign business is growing faster than local, I think it will take to five to seven years to do that,” Mr. Baysa told reporters.
Asked about the prospects for the domestic business, the company said imported inputs account for only 20% of its raw materials.
“The effect of the exchange rate over the long term is quite manageable,” Mr. Baysa added.
JFC Chairman Tony Tan Caktiong will focus on aggressively expanding stores in current markets, and is open to mergers and acquisitions in the Philippines, the US and China.
“What we’re looking at now is how to start expanding the existing market, how do we add stores in the current markets so that is our focus now,” Mr. Tan Caktiong said.
“We’re always on the lookout, really focused on the three markets, the Philippines, China and US. We’re still looking at the US and China for potential M&A. We’re looking at some other brands that can add value,” Mr. Tan Caktiong added.
In China, particularly, JFC sees huge potential and is not worried about possible restrictions on the repatriation of profits.
“The potential in China is so huge that we can just keep on investing. We don’t worry about repatriation. I think over the next many years will still be on expansion mode,” Mr. Tan Caktiong said.
Mr. Baysa said the business keeps growing even without opening stores,”so the conecpt of growing a business is in a way less dependent on stores because of delivery.”
JFC operates the Dunkin’ Donuts franchise in China.
The company is also looking to have 150 stores in the US and 100 stores in Canada over the next five years. It also has 50 stores planned for Europe, 25 of which will be located in the UK.
The company said it will open at least 500 new stores this year, equally split between the Philippines and overseas locations. Most of the new international stores will be in Vietnam at 120, while 40 will open in North America.
JFC allotted P17.2 billion for capital expenditure to support the store expansion and renovation of old stores.
Store count at the end of the first quarter was 4,543 across various brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, and Pho24.
JFC’s net income attributable to the parent fell 14.7% to P1.54 billion in the first quarter, amid a 14.1% increase in revenue to P40.35 billion.
The company said its recently-acquired US burger chain Smashburger weighed down on the consolidation result, as did slower same-store sales growth due to high inflation.
Mr. Tan Caktiong said Smashburger’s performance can improved in a year, based on the group’s experience with past acquisitions.
“The product is really really good, so what we need to do is update all the standards which is being started. Standard, meaning the store… Being managed,” Mr. Tan Caktion said.
Meanwhile, the company expects lower inflation in the first quarter to lead to a recovery in Philippine consumers’ purchasing power in the second half. — Janina C. Lim