Jollibee Group to implement 'measured price increases'

Homegrown fast food chain Jollibee Foods Corp. (JFC) on Monday announced “measured price increases” starting this quarter, following the double-digit decline in its first-quarter net income due to inflation and the impact of the Middle East conflict on global supply chains.

According to JFC chief executive officer Ernesto Tanmantiong, the company is responding to higher costs and the supply chain disruptions through adjusting its prices and tightening its expenses to protect profitability.

“While the operating environment remains dynamic, we are taking disciplined steps to manage near-term volatility through measured price increases beginning in Q2, alongside throughtful and targeted cost management initiatives, while continuing to advance sustainable growth and long-term shareholder value,” JFC chief executive officer Ernesto Tanmantiong said in a regulatory filing.

JFC said its net income fell 43.6% to P1.408 billion from P2.499 billion a year ago, as systemwide sales climbed 10.3% to P113.864 billion, and revenues grew 9.0% to P76.546 billion.

Attributable net income declined by 38.8% to P1.5 billion, reflecting lower operating profit and unfavorable below-the-line items. Earnings per share decreased 40.4% to P1.234 during the quarter.

“First-quarter profitability was impacted by temporary cost pressures. Underlying demand across the business remained healthy,” JFC chief financial and risk officer and Jollibee Group International Business chief executive officer Richard Shin said.

“We view these headwinds as manageable, supported by disciplined cost controls, ongoing productivity initiatives, and targeted margin recovery actions across our brands and markets,” he added.

Inflation stood at 4.1% in March, 2.4% in February, and 2.0% in January, bringing the first-quarter average to 2.8%.

The Jollibee Group expanded its footprint by 4.9% to 10,421 stores — 3,499 in the Philippines, and 6,922 international. its overseas network included 587 in China; 344 in North America; and 443 in Europe, Middle East, Africa, and Asia (EMEAA).

There were 1,011 under Highlands Coffee, mainly in Vietnam; 1,084 under the Coffee Bean and Tea Lead; 356 under Milksha; 3,015 under Compose Coffee; and 82 under Tim Ho Wan.

“We are managing today’s cost volatility prudently, and we remain confident in our long-term growth outlook. As costs normalize over time, we remain focused on prudent capital allocation and sustainable long-term growth,” Shin said.

The Jollibee Group aims to post up to 12% growth in its systemwide sales this year, with the company set to spend as much as P16 billion to expand its network by up to 1,300 stores.

The Jollibee Group’s portfolio includes wholly-owned brands Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Yonghe King, Hong Zhuang Yuan, Smashburger, and Tim Ho Wan; and franchised brands Burger King, Panda Express, Yoshinoya, Common Man Coffee Roasters, and Tiong Bahru Bakery.

It also has ownership stakes in The Coffee Bean and Tea Leaf (80%), Compose Coffee (70%), and bubble tea brand Milksha (51%), along with membership interests in Tortazo, LLC. —VAL, GMA News