Jollibee Foods Corp., the largest fast-food chain, said Wednesday net income in the first quarter of the year declined 14.7 percent to P1.53 billion due to losses from its Smashbuger business in the United States and weak domestic purchasing power.
JFC said in a disclosure to the stock exchange systemwide sales, a measure of all sales to consumers both from company-owned and franchised stores rose, rose 18.1 percent in the first quarter of 2019 to P54.3 billion.
Sales in the Philippines, which accounts for 73 percent of the group’s total system-wide sales, grew 9.5 percent from a year ago, mostly from new stores.
Sales from the foreign business also increased 48.6 percent with the consolidation of Smashburger.
Smashburger was consolidated in the financial statements of JFC in April 2018 when the company assumed 85 percent of the equity shares of the US-based hamburger chain.
Same store sales of the Philippine brands rose 1.7 percent while worldwide same store sales increased 1.9 percent.
JFC chief financial officer Ysmael Baysa cautioned that the company’s financial performance in 2019 by quarter would be mixed.
“Our sales and profit performance in the first and second quarters will not be as strong as in previous years. Same store sales growth of our brands in the Philippines in the first half will not be as strong as last year’s. Our profit is also being affected by the performance of Smashburger in the United States,” Baysa said.
“We look forward to sales and profit recovery in the 3rd and 4th quarters as consumers in the Philippines slowly regain their purchasing power after being adversely affected by high inflation in 2018. More importantly, we look forward to at least sustaining our historical sales and profit growth rates over the medium term, both in the Philippines and abroad, and transforming Smashburger into a much stronger business, as we had done with practically all our acquired businesses,” he added.
The fast-food giant earlier announced plans to spend P17.2 billion in capital expenditures this year to roll out 500 new stores.