Po family-controlled chain restaurant and food service group Shakey’s Pizza Asia Ventures, Inc. (SPAVI) dropped 13.9 percent to P421 million in the first half of 2024 from the P489 million generated in the same period last year as costs surged.

Amid a soft consumer environment, the Group said it sustained systemwide sales growth momentum while earnings performance remained subdued as expected,” SPAVI said in a disclosure to the Philippine Stock Exchange.

It added that the Group sees improvements in the second half as input costs improve, maintaining its mid-teens earnings growth outlook for 2024.

SPAVI’s systemwide sales in the first half of 2024 reached P10.1 billion, registering a jump of 14 percent year-on-year (YoY), driven by new stores opened during the period and sustained growth in same-store sales.

For the six-month period, the Group opened 210 new units, laddering up to a total network of 2,351 stores and outlets as of the end of June. Approximately 13 percent of its network is comprised of international units. 

Same-store sales growth clocked in at two percent, returning to pre-pandemic levels.

During the second quarter, systemwide sales amounted to P5.3 billion, posting a growth rate of 14 percent year-on-year (YoY). Sequentially, SWS in the second quarter of 2024 topped the first quarter by 11 percent as quarterly SSSG improves, fueled by celebrations. 

Furthermore, during the three-month period, a total of 119 new units were opened, more than one unit per day.

“We are grateful to be able to sustain our double-digit growth trajectory in these trying times,” said SPAVI President and CEO Vicente Gregorio. 

He noted that “ our guests are more cautious because of persistent inflationary pressures, which is why it was very uplifting to see the celebratory atmosphere during special occasions such as Mothers’ Day, Fathers’ Day, and the graduation season. 

“Our restaurant brands have always been known for get-togethers and celebrations among families and friends.”

In terms of profitability during the first half of 2024, SPAVI’s gross profits rose by 10 percent versus the same period last year to P1.6 billion. First half  gross margins expanded by 60 basis points YoY to 24.3 percent as commodities eased.

Given the anticipated improvements in input costs and the respective margin gain, investments were made in the form demand generating activities to support topline growth. 

Coupled with expenditures to grow the organization for both domestic and international expansion, operating expenses rose by 36 percent year-on-year. 

“With easing input costs and a better profitability outlook in the second half, we have room to invest in growth and expansion. Hence, we remain cautiously optimisitic with our mid-teens growth outlook in both top and bottomline,” Gregorio said.