Max’s Group, Inc. (MGI), an owner of several casual dining chains, reported a 33.3 percent drop in net income to P164 million in the first half of the year from the P246 million earned in the same period last year as costs rose while sales remained flat.

Based on the firm’s financial report submitted to the Philippine Stock Exchange, the firm’s first half system-wide sales (SWS) was almost flat at P9.18 billion this year versus P9.19 billion in 2023 while revenues were unchanged at P5.85 billion.

The group’s performance in SWS is significantly attributable to higher transaction count (TC) per store combined with improved the average check (AC) across the Group’s core brands. 

These results were partially driven by increased functions and events, brand promotions and corporate tie-ups.

Max’s said this also demonstrates sales and operational efficiencies from the optimization of retail trade areas across the country. 

It added that, “MGI’s ability to sustain sales and revenues underscores the Group’s effective strategies in enhancing operational efficiency and maximizing customer spend per visit despite the effects of geopolitical conflicts and local economic headwinds.”

The Group's core brands played a key role in MGI's performance in the first half of 2024. Max’s, Krispy Kreme, and Pancake House collectively achieved a 3.9 percent growth, with same-store sales growth (SSSG) ranging from 3.4 percent to 4.5 percent. 

Margins were effectively managed through cost-optimizing measures across the Group’s stores and commissaries resulting in improved contribution margins from 48.8 percent in the first half of 2023 to 49.6 percent in the same period of 2024. 

However, MGI’s profitability was affected by inflationary impacts on goods and services, increase in minimum wage and statutory benefits, contractual escalations in rent, and higher utility rates.

MGI’s consolidated cost of sales and services for the first half of 2024 increased by 1.6 percent compared to the same period last year, while it increased by 4.9 percent from the first quarter to the second quarter this year. 

As a percentage of revenues, the cost of sales and services for the first half of 2024 was 68.1 percent, up from last year’s 67.0 percent.