Fastfood chain operator Jollibee Foods Corp. said over the weekend it will continue to monitor the impact of the continued depreciation of the peso against the US dollar on its operations.
Jollibee chief finance officer Richard Shin said in a virtual press briefing that while the strong dollar could boost the purchasing power of consumers with dollar remittances, it could also have an impact on its import requirements.
The peso closed at 58.51 against the US dollar on May 31, 2024, near an 18-month low.
Shin said that in term of supply management, Jollibee is sourcing 60 percent of its raw material requirements from overseas and 40 percent from local vendors.
He said while the fast-food chain is using forward contracts and hedges to protect them from higher prices in the future, the peso-dollar exchange rate remained a concern over uncertainty on how much further the local currency would depreciate against the dollar.
“We continue to monitor because second quarter is a new quarter,” Shin said.
“But it is a concern in the sense how weak is the peso going to go? How strong is the dollar going to go? So those questions are still out there. So we keep monitoring,” he said.
He said the company would work closely with economists for guidance on how to plan its hedging program.
Meanwhile, Shin said the group would continue to expand in China despite the continued challenges. Jolibee’s same-store-sales in China declined 6 percent in the first quarter of 2024.
Shin said the company would open 100 new stores in China this year mostly under its Yonghe brand as it remains “careful with its capital allocation and investment”.
“But nonetheless, we’re in it for the long term in China. But we recognize that the short term is going to be bumpy and has been bumpy in Q1 and will probably continue to be bumpy,” he said.
Jollibee;s first-quarter net profit surged 26.9 percent to P2.6 billion from P2.06 billion in the same period last year on the back of the sustained growth in domestic and overseas businesses.
System-wide sales, a measure of sales from franchised and company-owned stores, went up 10.4 percent to P86.8 billion.
