By James A. Loyola
Jollibee Foods Corporation reported a 14.7 percent drop in attributable net income to P1.5 billion in the first quarter of the year mainly due to losses from Smashburger in the United States.
Smashburger was consolidated in the financial statements of JFC in April 2018 when JFC assumed 85 percent of the equity shares of Smashburger.
Excluding Smashburger, operating income grew by 9.1 percent.
Profit from the Philippine business which accounts for 73 percent of JFC's worldwide system wide sales grew by 11.1 percent.
System wide sales of Jollibee, a measure of all sales to consumers, both from company-owned and franchised stores rose by 18.1 percent in the first quarter of 2019 to P54.3 billion.
Sales in the Philippines grew by 9.5 percent during the quarter versus a year ago, mostly from new stores which accounted for 7.8 percent of the growth rate.
Same store sales of the Philippine brands grew by 1.7 percent. Worldwide same store sales increased by 1.9 percent.
Sales from foreign business increased by 48.6 percent with the consolidation of Smashburger. Excluding Smashburger, sales from the foreign business grew by 9.7 percent, with EMEAA (Europe, Middle East and Asia) growing by 23.5 percent and North America by 207.4 percent (21.9percent ex-Smashburger).
China business' system wide sales declined by 6.2 percent (-2.3 percent in local currency) due to slower growth of its delivery business and the negative impact of foreign currency changes.
JFC's Chief Financial Officer Ysmael V. Baysa cautioned that JFC's financial performance in 2019 by quarter will be mixed.
"We look forward to continued growth in 2019 with the opening of about 500 new stores and capital investments of P17.2 billion. Our financial performance in 2019 by quarter, however, will be mixed,” he said.
Baysa added that, “our sales and profit performance in the first and second quarters will not be as strong as in previous years. Same store sales growth of our brands in the Philippines in the first half will not be as strong as last year's.”
He noted that, “our profit is also being affected by the performance of Smashburger in the United States. We look forward to sales and profit recovery in the third and fourth quarters as consumers in the Philippines slowly regain their purchasing power after being adversely affected by high inflation in 2018.”
“More importantly, we look forward to at least sustaining our historical sales and profit growth rates over the medium term, both in the Philippines and abroad, and transforming Smashburger into a much stronger business, as we had done with practically all our acquired businesses," Baysa said.