Shakey’s Pizza Asia Ventures Inc. (SPAVI), one of the leading restaurant and kiosk operators, saw its first-quarter net income slide 27 percent as the costs of aggressive store expansion and marketing offset a double-digit rise in systemwide sales.

In a disclosure to the Philippine Stock Exchange, the firm said unaudited net income fell to ₱134 million in the first three months of the year.

According to Shakey’s, the bottom line was pressured by demand-generating investments, subdued consumer spending, and non-recurring costs related to network restructuring.

Excluding those one-off items, Shakey’s core profit declined 17 percent compared to the same period in 2025.

At end-March, systemwide sales, which include those from franchised outlets, climbed 14 percent to ₱6.4 billion, largely fueled by the group's growing footprint rather than organic growth. Revenues rose 13 percent to ₱4.0 billion, while same-store sales remained flat year-on-year.

Vicente Gregorio, SPAVI president and chief executive officer, noted that the company entered 2026 braced for a difficult operating climate, citing the added pressure of prolonged geopolitical instability in the Middle East.

“While efforts are underway to navigate headwinds in pursuit of growth, they come with near-term impacts on our bottom line,” Gregorio said.

SPAVI’s aggressive expansion saw it open 69 new units during the quarter, bringing its global network to 3,039 stores and outlets. Among the milestones was the opening of its 3,000th unit—a Shakey’s flagship in Arca South, Metro Manila—and its 300th Shakey’s location in Zamboanga.

Meanwhile, the Potato Corner brand expanded its international presence by entering Laos, its 17th overseas market, and launched a larger-format “XP” experiential store in Quezon City.

However, the cost of maintaining this momentum is evident in the margins. Gross profit margins narrowed by 120 basis points to 20.1 percent, as expansion-related expenses negated the benefits of favorable raw material inputs.

Advertising and promotional spending also climbed to stimulate demand, pushing operating expenses up by 50 basis points as a percentage of sales. Consequently, the headline net profit margin contracted to 3.3 percent.

Despite the earnings dip, the company pointed to a seven percent growth in core Ebitda as evidence of its fundamental cash-generating strength. Gregorio signaled a more disciplined approach to capital expenditure moving forward, stating the group will be “choiceful” in resource deployment.

The company is now targeting new stores with higher hurdle rates and reviewing its overall network strategy to ensure capital efficiency. As of the end of March, 16 percent of SPAVI’s total units were located outside the Philippines. (James A. Loyola)