MANILA— Homegrown fast-food giant Jollibee Foods Corp. (JFC) posted a 15-percent increase in profit in 2017 to PHP7.1 billion after opening its highest number of new stores.
JFC’s net income attributable to equity holders of its parent firm reached PHP6.2 billion in 2016.
For the October-to-December quarter alone, its attributable net profit rose by 11.7 percent to PHP1.98 billion last year from PHP1.78 billion in 2016.
The company opened 465 stores in 2017, the highest number of new stores in a year in its 39-year history.
JFC’s system-wide sales, a measure of all sales to consumers both from company-owned and franchised stores, grew by 16.9 percent in the fourth quarter compared to sales in the same period of 2016 and by 15.2 percent for the entire year of 2017, driven by the expansion of store network and strong same store sales.
For the entire year, sales of its restaurant chains in the Philippines grew by 13.2 percent while those abroad rose by 23.4 percent.
“Gross profit margins in the Philippines were below year-ago level as our rate of price adjustments was behind cost increases, following JFC’s practice of implementing gradual price adjustments in order to help consumers adapt to rising inflation,” said JFC’s Chief Financial Officer Ysmael Baysa in a statement to the local bourse.
“The gradual price adjustments help to continuously drive volume growth of consumer visits per store despite rising inflation rate in the country. We expect to eventually recover our profit margins in 2018,” he said.
It ended 2017 with 3,797 stores, higher by 16.7 percent compared with 2016’s 3,253 stores. JFC had 2,875 restaurant outlets in the Philippines, and was operating 922 stores abroad.
Sales of the Philippine business in the fourth quarter grew by 14.8 percent, driven by the acceleration of store network expansion and continued strong same store sales growth.
Sales of the foreign business grew by 21.3 percent, excluding divestments and acquisition, with Southeast Asia, excluding Philippines, growing by 41 percent; China (18.4 percent); North America (20.6 percent); and the Middle East (17.7 percent).
Including divestments and acquisition, sales of the foreign business grew by 26.3 percent.
The strong worldwide sales growth of 16.9 percent for the quarter was driven by same store sales increase of 7 percent, store expansion of 9 percent, and 1 percent impact of currency exchange rate change.
For 2018, JFC allotted PHP12 billion in capital expenditures for new stores and renovation of existing stores, both in the Philippines and abroad.