Jollibee's Q2 profits down 50.2%
The fast food chain expects profits to recover by 2020.
Jollibee Foods Corporation (JFC) reported a 50.2% fall in its net income during its fiscal second quarter, citing "extraordinary" manufacturing expenses, losses from Smashburger and one-off expenses for Red Ribbon.
In a disclosure to the Philippine Stock Exchange, the fast food conglomerate saw net income attributable to equity holders fell to P1.12bn in Q2 from P2.25bn during the same period last year.
Jollibee, which also saw system-wide sales grow 10.2% in Q2, said profits will recover by 2020.
"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 chief financial officer Ysmael Baysa said.
Red Ribbon sales in particular were hurt by a supply shortage, as the chain transferred its main production facility to a new commissary.
Baysa also noted that its recent acquisition of The Coffee Bean and Tea Leaf is expected to add to profits within 12 to 18 months.
“We continue to aim to achieve the profit level in 2020 and in the years ahead that we set two years ago despite the profit challenges in 2019 which are short term and sustain our historical profit growth rate moving forward,” he added.
JFC said it opened 170 stores in the first six months of the year, 111 of which were in the Philippines.
