Max’s Group Inc., the country’s largest casual dining restaurant group, reported a 27 percent drop in net income to P314 million for the first nine months of 2023 from P428 million in the same period last year.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said it realized a net income of P331 million and operating income of P954 million, before one-time accounting adjustments and one-off transactions.

“The year-on-year decline by 23 percent and 15 percent, respectively, is attributable to the boost in selling and marketing activities and to higher store related expenses that were instrumental in revitalizing the customer dining experience,” MGI said.

Revenues grew 13 percent to P8.8 billion for the first nine months of 2023 from P7.77 billion in the same period of 2022 as systemwide sales (SWS) improved 10 percent to P13.81 billion from P12.56 billion, propelled by local Same Store Sales Growth (SSSG) of nine percent.

“Our reinvigorated efforts to provide customers with fresh experiences through product and retail innovations make us optimistic as the dine-in segment in particular gets a boost with the expected higher consumer spending in anticipation of the holiday season, the declining unemployment rate, and the overall trajectory of household consumption expenditure,” said MGI President and CEO Robert F. Trota.

He added that, “these results underscore our steady growth rate notwithstanding the effects of challenging market conditions, and our teams are ready to channel this momentum into the Christmas season, priming us for a strong finish to cap the year.”

“The solid performance is owed to the Group’s dedication to provide great food and great service to its growing base of customers,” said MGI. 

It noted that, Max’s Restaurant and Pancake House are on track in rebounding from a challenging past three years as they capitalize on the growing market appetite for eating out. 

Meanwhile, Yellow Cab Pizza Co. and Krispy Kreme continue to be the Group’s stalwarts in the off-premise channels, while MGI’s international arm sustains its growing contribution with strong operations in the Group’s operations in the rest of Asia, North America, and the Middle East.

Revenue growth is further complemented by retail enhancements to ensure a more customer-centric experience. 

The brands’ store renovations and relocations in high foot traffic areas and its successful expansion in previously unserved provincial markets boosted sales, and serves as a testament to the increasing demand for MGI’s presence outside the metro. 

In addition to the Group’s formidable portfolio of brands, MGI has expanded its foothold in the Philippines’ food service industry by providing restaurant-quality ready-to-cook products to consumers through more than 2,500 locations nationwide, primarily in supermarkets and convenience stores.

The Group’s gross profit for the first nine months of 2023 totaled P2.8 billion with a 32.5 percent margin, a marked improvement compared to 2019 pre-pandemic levels of 26.1 percent due to strategic measures implemented to ensure more efficient operations. 

MGI said it aligned its strong top line performance towards reinvestment in the business in the form of increased store manpower and retail enhancements to ultimately improve customer experience. Such reinvestments and additional costs have contracted the margins by 1.7 percent versus 2022.

As of the third quarter, the Group’s store network covers 14 territories, with 591 Philippine branches across its brands, and 66 stores situated across various locations in North America, the Middle East, and Asia.