MANILA, Philippines – Fastfood giant Jollibee Foods Corp. (JFC) is banking on Filipinos’ higher spending power, new branches and product launches to grow its profits further this year.
The Philippines’ largest quickservice restaurant chain also expects better profitability in its operations in China, top company executives said yesterday.
“There are two [growth] drivers: one is better products and the other one is election spending,” JFC chief finance officer Ysmael V. Baysa told reporters after the company’s annual stockholders’ meeting.
Baysa said the effects of the election spending will taper off in the second half but JFC plans to introduce new products and improve its lineup.
The current weakness of the peso is also seen to benefit the Philippine operations of JFC.
“From different angles, it can be good [because] the OFW family’s income will be a little bit higher,” said JFC chairman and CEO Tony Tan Caktiong.
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For the entire year, JFC expects earnings per share to grow 12 percent. This will require at least a five-percent uptick in samestore sales, Baysa said.
In the first three months, JFC’s net income grew 29 percent to P881 million from P682 million a year ago due to higher samestore sales and new branches.
Systemwide sales, a measure of all sales to customers both in company-owned and franchised stores, picked up 10.6 percent to P23.83 billion in the first quarter.
For its expansion plans, the fastfood giant is sticking to its plan of spending P5.5 billion to put up 300 new stores across all its brands here and abroad.
“In the first half of the year, we are usually behind the spending. But we hope we will be able to catch up for the rest of the year,” Baysa said.
In China, JFC targets to reach 500 branches next year from the current 400 stores.
“A big part of the improvement [in the first quarter] came from the improvement in China,” Baysa said.
For other countries, Jollibee is continuously looking at Indonesia and India.
“We are still on the lookout on how we can expand into Indonesia and India. In Myanmar, we haven’t started looking yet but lots of interested parties are convincing us to go into Myanmar,” Tan Caktiong said.
Tan Caktiong said JFC wants to focus first on big, populated countries like China.
To date, JFC’s local operations account for 80 percent of the business.
“Probably by the end of the year, that will just change slightly, maybe 79 percent in the Philippines and 21 percent abroad,” Baysa said.
JFC operates the largest fastfood service network in the Philippines with 2,090 branches composed of 783 Jollibee branches, 389 Chowking, 197 Greenwich, 228 Red Ribbon, 464 Mang Inasal and 29 Burger King.
The foreign operations of JFC has 562 stores: Yonghe King with 306 stores, Hong Zhuang Yuan with 46 and San Pin Wang with 39, all in China; 94 Jollibee, 31 Red Ribbon, 43 Chowking, and three Chow Fun located in US, Southeast Asia and the Middle East.