LOCAL fast-food company Jollibee Foods Corp. on Tuesday said its net income fell 19 percent for the entire 2019 to P6.75 billion from P8.33 billion in 2018, still as a result of the supply chain issues of Red Ribbon and the losses of Smashburger in the United States, as the fourth quarter push was unable to lift its entire year’s performance.
System-wide sales rose 15 percent to P243.79 billion, from P212.18 billion the previous year.
“2019 was a very tough year for JFC…. We are very encouraged by the continued rise in customer visits to our stores…the recovery of Red Ribbon product supply in the Philippines and the very good indicators of recovery in Smashburger business in the United States,” Ernesto Tanmantiong, the company’s CEO, said.
Its net income for the fourth quarter alone recovered, reaching P1.8 billion from the P1.31 billion in 2018.
Revenues rose 17 percent to P52.43 billion from P44.56 billion in the previous year, with Coffee Bean and Tea Leaf (CBTL)—which the company acquired in September 24, 2019—contributing 9 percent to the revenue growth and adding 1,173 stores to the Group’s global store network.
For the entire year, the company opened 497 stores, some 273 in the Philippines and 224 abroad.
System-wide sales increased by 23 percent in the fourth quarter of 2019 to P72.72 billion, from the previous P59 billion, including the impact of CBTL. Without CBTL, system-wide sales for the fourth quarter grew only by 9 percent.
“We look forward to a much stronger sales and profit performance in 2020 and the years ahead even as we consolidate the financial performance of CBTL into our financial results,” Tanmantiong said.
The net income for the fourth quarter also includes the impact of Philippine Financial Reporting Standard (PFRS) 16, which translates leased spaces into assets in the form of rights of use, but not owned.
With PFRS 16, income for the entire 2019 was at P6.33 billion, down just 14 percent from last year’s P7.4 billion. For 2020, the company plans to open 600 stores—250 to 300 in the Philippines and the rest, abroad.
“The returns on investment of JFC’s new stores abroad are at least as profitable as those in the Philippines. 2020 may mark the first time in JFC’s history when the international business generates greater organic store expansion than the Philippine business,” it said.