Jollibee Foods Corp. (PSE: JFC), the largest Asian food service company, opened a total of 502 stores in 2018, the highest number of new stores opened in a year in JFC’s 40-year history. System-wide sales, a measure of all sales to consumers, both from company owned and franchise stores, grew by 22% in the fourth quarter of 2018 (4Q) compared to the same period in 2017, and by 23.5% for the entire year 2018. Excluding the impact of the consolidation of Smashburger into JFC effective April 2018, system-wide sales grew by 13.6% in 4Q 2018 year-on-year, and by 16.6% for the full year 2018.
In the Philippines, sales of its restaurant chains grew by 15.1% for the entire year, driven by 8.2% contribution from new stores and 6.9% same store sales growth. Same store sales growth pertains to restaurants that were already open for at least 15 months. It excludes sales growth from new store opening. Sales of stores abroad rose by 55.5%, led by the North America business, which grew by 161.1% due to the consolidation of Smashburger (21.7% ex-Smashburger), Europe, Middle East, and Asia ex-Philippines (EMEAA) business grew by 42.7% (28.6% ex-SuperFoods) and the China business by 9.1%.
Operating income for the year grew by 18.4% to PhP7.9 billion. Operating income margins for the entire year decreased slightly by 0.1% mainly due to the consolidation of Smashburger.
JFC’s net income attributable to equity holders of the Parent reached PhP8.3 billion in 2018, 17.1% higher than the amount generated in 2017. For the quarter, JFC’s net income attributable to equity holders of the Parent increased by 11.9% to PhP2.2 billion versus the same quarter in 2017. Basic earnings per share (EPS) for 2018 amounted to PhP7.66, 16.4% higher than the basic EPS for 2017. For the fourth quarter, basic EPS increased by 11.5% to PhP2.06.
JFC CEO Ernesto Tanmantiong commented, “The Philippine business performed strongly in 2018 despite rising inflation rate and slowing GDP growth. Same store sales grew by 6.9% in 2018 compared with 5.3% in 2017 while growing store network by 8.7%. Operating margin even improved slightly compared with 2017. Our foreign business grew by 22.1% organically (excluding acquisitions), in line with our long-term growth mode. We opened 502 stores worldwide, or a rate of 1.4 new stores per day. We continue to pursue our aspiration to become one of the top restaurant companies in the world.”
During the year, JFC made PhP9.6 billion in capital investments, mostly in new stores, renovations of existing stores and supply chain facilities. The JFC Group opened 317 stores in the Philippines and 185 new stores abroad. It re-entered Malaysia with the opening of a Jollibee store in Kota Kinabalu on December 15, 2018. It ended 2018 with 4,521 stores, 19.1% higher compared to 3,797 stores at the end of 2017. JFC entered four countries in 2018: Italy (Milan) in April, Macau in June, United Kingdom (London) in October, and Malaysia in December.
For 2019, JFC has alloted PhP17.2 billion in capital expenditures for new stores, renovation of existing stores and investments in manufacturing plants. This amount is almost double the actual spending in 2018.
JFC operates the largest food service network in the Philippines. At the end of 2018, it was operating 3,126 restaurant outlets in the country: Jollibee brand, 1,146; Chowking, 573; Greenwhich, 285; Red Ribbon, 468; Mang Inasal, 552; Burger King, 101; and PHO24, 1. Abroad, it was operating 1,395 stores: Yonghe King (China), 320; Hong Zhuang Yuan (China), 44; Dunkin’ Donuts (China), 13; Jollibee, 232 (Vietnam, 116; Brunei, 16; Hong Kong, 8; Singapore, 6; Macau, 1; Malaysia, 1; United States, 36; Canada, 4; Saudi Arabia, 13; UAE, 14; Qatar, 7; Kuwait, 6; Bahrain, 1; Oman, 1; Italy, 1; United Kingdom, 1); Red Ribbon in the US, 31; Chowking, 47 (US, 15; UAE, 21; Qatar, 4; Oman, 2; Kuwait, 3; and Saudi Arabia, 2); Highlands Coffee, 317 (Vietnam, 275; Philippines, 42); PHO24, 34 (Vietnam 18; Indonesia, 16); Hard Rock Cafe, 8 (Vietnam 2; Hong Kong, 3; Macau, 3); and Smashburger, 349. The JFC Group’s worldwide store network totals 4,521 stores.