Jollibee Foods Corporation (JFC), one of the largest Asian food service companies, reported a 1,412 percent surge in attributable net income to P2.3 billion in the first quarter of 2022 from P152.6 million in the sae period last year.
In a disclosure to the Philippine Stock Exchange, the firm said net income for the first quarter of 2022 includes gains from the transfer of certain land properties of the JFC Group to CentralHub and sale of other land properties amounting to P1.8 billion.
System wide sales, a measure of all sales to consumers both from company-owned and franchised stores, grew by 25.5 percent to P60.0 billion in the first quarter of 2022.
This was driven by strong same store sales growth of 16.5 percent and global store network expansion and new acquisition, which contributed 5.5 percent. Currency translation added 3.5 percent to the growth.
Global same store sales for the first quarter of 2022 grew by 16.5% compared to the same quarter of 2021, was led by The Coffee Bean and Tea Leaf (CBTL) which grew by 23.3 percent, the Philippine business by 22.9 percent, North America by 8.1 percent, and EMEAA (Europe, Middle East, and Asia) by 6.2 percent.
The China business’ same store sales declined by 9.1 percent due to heightened COVID-related restrictions imposed on key cities.
Operating income increased by 33.8 percent to P2.0 billion in the first quarter of 2022 driven by the acceleration of profit growth in the Philippines.
Gross profit margin was slightly below year-ago level due to rising inflation rate and higher freight charges. JFC implemented price adjustments in 2021 and the first quarter of 2022 and continued with internal cost efficiencies to support its profit margins.
JFC Chief Financial Officer Richard Shin said over the same period in 2021 noting that, “Costs are accelerating because of higher inflation and broad- based supply chain challenges. JFC will take the necessary steps to protect its margins including implementing cost improvement and revenue management initiatives.”
Compared with pre-pandemic levels, total system wide sales and revenues in the first quarter of 2022 were already ahead by 10.5 percent and 6.2 percent, respectively versus the first quarter of 2019. Operating income was slightly lower by 5.2 percent while attributable net income was higher by 58 percent.
“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 performed well and even set new record for sales for a first quarter,” said JFC Chief Executive Officer Ernesto Tanmantiong.
He added that, “System wide sales of our businesses in China, North America (Philippine brands), EMEAA including SuperFoods have reached pre-pandemic levels driven by continued store expansion.”
The store network of JFC’s foreign business for the first quarter of 2022 grew by 20.3 percent organically (excluding acquisitions) compared to the first quarter of 2019, in line with the firm’s long-term growth model.
“Sales of our Philippine business were still below pre-pandemic levels, but are showing sustained strong growth for off-premise sales which grew by 57 percent compared to the first quarter of 2019, offsetting the decline in dine-in sales,” Tanmantiong said.
He noted that, “Delivery sales accounted for 20 percent of the Philippine business’ system wide sales and have grown five-fold since 2019.”
“In terms of operating profit, JFC’s Philippine business performed better compared to the first quarter of 2019 despite a decline in revenues and rising inflation. The Business Transformation Program implemented in 2020 and the continuing strong cost and profit management of the JFC Group made this possible,” Tanmantiong said.