Restaurant operator Jollibee Foods Corp. said second-quarter net income fell 50 percent to P1.12 billion from P2.25 billion in the same period last year because of extraordinary manufacturing expenses, lower sales of Red Ribbon and losses from Smashburger in the United States.
Jollibee’s net income also dropped 34.4 percent in the first half to P2.65 billion from P4.05 billion while revenues went up by 13.8 percent to P113.7 billion.
Jollibee said in a disclosure to the stock exchange system-wide sales, a measure of sales to consumers both from company-owned and franchised stores, grew 10.2 percent in the second quarter to P59.42 billion.
Same-store sales growth in the Philippines improved to 4.2 percent in the second quarter from 1.4 percent in the first quarter, excluding the Red Ribbon business.
Sales from foreign business increased by 8.6 percent, with EMEAA (Europe, Middle East and Asia) growing by 20.9 percent and North America by 11.3 percent.
System-wide sales in China increased 2.3 percent while same-store sales improved to 3.5 percent, from a 1.1-percent drop in the first quarter of 2019.
“Same-store sales growth in the Philippines continued to improve as we estimated, as consumers gradually regained their purchasing power with increasing wages and lower inflation rate,” JFC chief financial officer Ysmael Baysa said.
Baysa said that with Smashburger, JFC introduced major changes that created short-term disruption in sales and profit but would drive sustainable sales growth and strengthen the brand’s health.
Baysa said the sales of Red Ribbon were adversely affected by product supply shortage as it transferred its main production facility to a new commissary south of Metro Manila. Full product supply is expected by September 2019.
“The acquisition of Coffee Bean and Tea Leaf, when completed is expected to add to our profit within 12 to 18 months of acquisition. We continue to aim to achieve the profit level in 2020 and in the years ahead that we set two years ago despite the profit challenges in 2019 which are short-term and sustain our historical profit growth rate moving forward,” Baysa said.
JFC said in July it would acquire CBTL based in Los Angeles, California for $350 million.