Jollibee income slumps in Q2

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Title: Jollibee income slumps in Q2

Metro Manila (CNN Philippines, August 5) — Earnings of Jollibee Foods Corporation (JFC) slumped in the second quarter of 2019, pulled by losses and lower sales from two of its business units.

The homegrown food giant on Monday reported that its attributable net income fell by 50.2 percent to ₱1.1 billion in April to June, attributed to "extraordinary manufacturing expenses for and lower sales of Red Ribbon related to the transition to the new plant and losses from Smashburger in the United States."

Year to date, the attributable income dropped by 34.4 percent to ₱2.6 billion from the ₱4 billion posted in the same period in 2018.

"Red Ribbon products will be in complete supply in September. On Smashburger, we introduced major changes that created short term disruption in sales and profit but will drive sustainable sales growth and strengthen the brand health," JFC's Chief Financial Officer Ysmael Baysa said in a statement.

Operating income in the three-month period also fell 52.3 percent to ₱1.1 billion from ₱2.3 billion in the second quarter of 2018. Year-to-date, operating income fell to P2.9 billion33.3 percent lower than a year ago.

JFC said its system-wide sales grew by 10.2 percent to ₱59.4 billion, resulting in revenues of ₱43.6 billion.

Same-store sales growth in the Philippines, excluding Red Ribbon, improved to 4.2 percent.

Internationally, JFC's sales growth rose 3.5 percent in China, 8.3 percent in the US, 8.7 percent in Vietnam, and 1.4 percent in the Middle East and other parts of Asia.

For the first half of 2019, worldwide sales grew by 13.8 percent year-on-year, with Philippines-based operations increasing by 10.2 percent and foreign businesses by nearly 25 percent.

Last month, JFC revealed its plan to acquire American coffee chain The Coffee Bean & Tea Leaf, marking its largest acquisition outside the Philippines. Baysa said the acquisition, once completed, is expected to boost JFC's profit "within 12-18 months."

READ: Jollibee stocks fall after Coffee Bean buyout plan

The food giant said it opened 170 stores from January to June, 111 of which are located in the country while 59 are abroad. It ended the first half of the year operating 3,195 local stores and 1,418 restaurant outlets in other countries.

JFC shares dropped by 4.26 percent to close at ₱247 each on Monday from ₱258.80 on Friday.