SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) grew its earnings by seven percent in the second quarter of 2018, as higher prices of raw materials tempered the double-digit increase in sales.
In a regulatory filing, the listed casual restaurant operator reported a net income of P212.41 million in the April to June period of 2018, higher than the P198.52 million it generated in the same period a year ago. This followed a 16% increase in systemwide sales — which measures sales from both company-owned and franchised stores — to P2.4 billion during the period.
Second quarter revenues meanwhile picked up 12% to P1.92 billion.
Same-store sales growth (SSSG) stood at nine percent for the three-month period, higher than the two percent increase seen in the same period in 2017.
This pushed SPAVI’s net income seven percent higher to P396 million in the six months ending June, against the P371 million it realized in the same period a year ago, following a nine percent uptick in revenues to P3.69 billion.
Systemwide sales climbed 13% to P4.6 billion, as same-store sales grew by five percent during the first semester. The SSSG for the six-month period matches the high end of SPAVI’s full-year SSSG target growth of 3-5%.
“Despite the slight compression in our margins year-on-year, we remain above average in terms of our profitability metrics and see this as an advantage in weathering competitive headwinds,” SPAVI President and Chief Executive Officer Vicente L. Gregorio said in a statement.
Mr. Gregorio noted the company expects challenges for the remainder of the year.
“However, we do expect managing higher input costs, a depreciating peso, and continuously rising inflation to remain a challenge in the short to medium term,” Mr. Gregorio said, saying that there are opportunities to maximize scale, increase efficiencies, and manage overhead costs in order to meet its double-digit earnings growth target for the year.
The SPAVI executive added the company will be launching new campaigns during the coming holidays to take advantage of the positive consumer sentiment, as well as to offset the seasonal slowdown caused by the rainy season.
SPAVI ended the first half of 2018 with 217 stores in the country after opening five new outlets. It looks to close the year with a total of 228 stores locally.
Overseas, the company has recently opened its first outlet in Dubai, which also marks its second international store after Kuwait. SPAVI is banking on the large population of overseas Filipino workers in these markets to drive sales.
Shares in SPAVI fell by 0.31% or four centavos to close at P13.06 each at the stock exchange on Tuesday. — Arra B. Francia