Jollibee posts jump in net, operating income but cautious of rising costs

ABS-CBN News

Posted at May 12 2022 10:01 AM

MANILA - Jollibee Foods Corp on Thursday said its net income attributable to equity holders hit P2.3 billion in the first quarter, a rebound compared to the P152.6 million in the same period last year.

Operating income, meanwhile, rose by 33.8 percent to P2 billion for the quarter "driven by the acceleration of profit growth in the Philippines," the country's largest restaurant operator told the stock exchange.

System-wide sales grew by 25.5 percent to P60 billion in the quarter driven by strong same-store sales growth, global store network expansion, and new acquisitions, it added.

The first quarter system-wide sales include sales from Milksha, a popular Taiwanese bubble tea brand. 

JFC said the quarter's net income includes gains from the transfer of certain land properties to DoubleDragon's CentralHub. 

"Despite the challenges brought about by the surge in omicron variant in some markets where JFC operates and the increase in prices of raw materials and energy, our business in China, North America (Philippine
brands), EMEAA including SuperFoods have reached pre-pandemic levels driven by continued store expansion," JFC CEO Ernesto Tanmantiong said. 

For the first quarter, the group opened 107 new stores, JFC said. During the pandemic, a total of 58 stores were permanently closed during the quarter, it added.

But JFC remains wary of the rising costs of raw materials.

It said it has implemented price adjustments in 2021 and the first quarter of 2022 while continuing internal cost efficiencies to support profit margins.

"Costs are accelerating because of higher inflation and broad-based supply chain challenges. JFC will take necessary steps to protect its margins including implementing cost improvement and revenue management initiatives," JFC Chief Financial Officer Richard Shin said.

Inflation in April hit 4.9 percent, above the 2 to 4 percent target, due to rising food prices and oil as well as the global prices of other commodities. Supply-chain disruptions contribute to supply-side woes.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno earlier said inflation could average at 4.3 percent for the year and is likely to remain elevated for the remaining months of 2022.

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