Casual dining restaurant group Max’s Group, Inc. further bled as it incurred another loss in the second quarter to shed P602.9 million in the first six months of the year.
In a disclosure to the stock exchange on Friday, the listed restaurant operator said its second- quarter systemwide sales from both company-owned and franchised stories plunged by 68.9% to P1.6 billion. Same-store sales also fell by 55.8%.
Its revenues declined by 71.1% to P1.1 billion between April and June as its local stores were trading via delivery and take-away channels. Its mall sites, comprising almost half of the group’s domestic network, were shut from mid-March to May due to quarantine restrictions.
“The poor performance for the second quarter of the year was, as expected, a result of the historic challenges the industry faces during this global pandemic. We have taken this opportunity to leverage our core sources of strength to underpin a strategic transformation geared towards our eventual recovery,” Max’s President and Chief Executive Officer Robert F. Trota said.
In the first half, Max’s systemwide sales fell by 42.5% to P5.6 billion, with same-store sales declining by 26.5%. Its revenues in the same period also faltered by 46.2% to P3.8 billion.
Despite a volatile business landscape, the company remained committed to renew its business. It is presently diversifying its consumer services and platforms to adapt to changing consumer behavior, Mr. Trota said.
Max’s brands Yellow Cab and Krispy Kreme showed resilience and market relevance during the quarantine phase due to “intrinsic demand” in delivery and take-away channels.
A “progressive” sales recovery of Max’s Restaurant and Pancake House brands was seen after lockdowns were eased to allow dine-in in physical restaurants.
The pandemic’s impact “demanded that we rethink how we can do more with less, and rebuild our foundation for sustainable growth,” said Max’s Chief Operating Officer Ariel P. Fermin.
The restaurant group has “rapidly identified and scaled green shoots,” such as ready-to-cook meal formats, alternative on-the-go services, work-from-home meals, and multi-brand cloud kitchens to widen its reach while addressing consumers’ safety concerns.
Moreover, it has recalibrated its operations through technology transfer across commissaries to avoid redundancies in suppliers, toll manufacturers, and hubs. The company also combined logistics to cut transportation costs and lift service levels via dynamic routing and co-loading.
“At store level, we aim to improve margins through a combination of optimal pricing, rationalized menus, and shared materials across brands and products to leverage on volume,” Mr. Fermin added.
Max’s will “control” its store network expansion and accelerate the closure of unprofitable stores for the rest of the year, minding its adherence to scheduled pipeline, Mr. Trota said. “We believe we have the right strategic fundamentals in place for a robust return to profitability,” he added.
The company is running its store network in 745 locations, with 686 in the Philippines and 59 located in various sites in North America the Middle East, and Asia. About 85% or 630 stores were operational as of end-June.
On Friday, shares in Max’s inched down 0.14% to close at P4.88 each. — Adam J. Ang