FAST-FOOD giant Jollibee Foods Corp. said its net income rose 10 percent during the first nine months of the year, but growth in the third quarter was slower than the previous quarter due to higher expenses.
The company said its January-to-September income grew to P4.37 billion, from last year’s P3.93 billion.
System-wide sales, measure of all sales to consumers both from company-owned and franchised stores, grew 14 percent to P107.76 billion, from the previous year’s P94.47 billion.
Income for the third quarter, however, was a slim 3 percent to P1.3 billion, from last year’s P1.26 billion.
Growth rate for the previous quarter was faster, with profits up by 11 percent and system-wide sales at 15 percent.
Ysmael Baysa, the company’s CFO, said the company’s store-operating expenses rose due to increase in average headcount per store in the Philippines.
“This was necessary to ensure we maintain and further improve the quality of our services and food in the restaurants, even as the volume of sales per store continued to rise significantly, particularly in the last two years,” Baysa said.
The cost of its general and administrative expenses rose by 17 percent, higher than the increase in revenues of 11 percent, as the company invested in technology, network-development organization, market research, training for its field personnel, and for merger and acquisition projects, he said. “We expect the growth of these expenses to be lower in the fourth quarter of 2016 and for the full year of 2017, as we go past the peak of our investment spending in increasing systems capability,” he said.
For the quarter, its fast-food chains in the Philippines and the US grew by 14 percent each, Southeast Asia and the Middle East combined rose by 26 percent, but China business fell 2 percent.
“We expect to end 2016 with the highest system-wide sales growth in five years and the highest organic growth in at least a decade, driven by strong same store-sales growth and the highest store-network expansion,” the company’s CEO Ernesto Tanmantiong said.
The company opened 201 new stores in the first nine months of 2016, consisting of 133 in the Philippines and 68 abroad. Last year it opened 186 new stores.
“We look forward to the continued recovery of our China business in the months ahead with the introduction of new products. Our plans for 2017 and the following years call for continued strong same store-sales growth and store-network expansion in the Philippines and abroad with the aim of surpassing our historical performance,” he said.