Jollibee Foods Corporation Sustains Strong Revenue by 10.6% in Q22024

Jollibee Foods Corporation (JFC, also known as Jollibee Group) one of the largest Asian food service companies,  reported its financial results of operations for the second quarter ended June 30, 2024, based on its Unaudited Consolidated Financial Statements.

Jollibee Group CEO Ernesto Tanmantiong gave the following statement on the Jollibee Group’s performance for the second quarter:

“The Jollibee Group’s momentum this year continues with excellent second quarter performance. Our revenue grew by 10.6% led by the Philippine business which increased by 11.1% and International business which grew by 9.7%. Our margins expanded, 150 basis points (bps) for gross profit from 18.0% to 19.5% and 90bps for operating income growing from 6.6% to 7.5%, reflecting our strong operational execution.

Systemwide sales (SWS) for the quarter rose 12.1% year-on-year, with the Philippine business’ Jollibee, Chowking and Mang Inasal brands outperforming their SWS targets. Our international business delivered strong second quarter SWS with robust growth in EMEAA and North America. Our coffee and tea business improved sequentially and year-on-year, led by The Coffee Bean and Tea Leaf® (CBTL) which grew SWS by 25.6% during the quarter.

Jollibee, our lead global brand for the chicken category continued to execute well. SWS of the Jollibee Philippine business grew by 11.8% while international business grew by 23.9% with EMEAA and North America growing by 28.0% and 18.9%, respectively. Same store sales grew ahead of industry both for the Philippines and internationally. Alongside these ahead of industry results, I am particularly pleased to share that our Jollibee brand has been named Best Fast Food Fried Chicken (2024) by USA Today 10Best.

I’d like to thank our Global team for delivering another strong performance. I look forward to building on these positive results throughout the rest of the year.”

The growth in the Jollibee Group’s SWS for the quarter was driven by a combination of same store sales growth (SSSG) (+7.4%), new stores sales (+3.6%) and changes in foreign currency (1.0%). Sales of digital channels, which include online sales and self-order kiosks accelerated, registering a growth of 22.4% driven by EMEA (+195.4%), CBTL (+35.6%) and Philippines (+29.6%). Digital channel accounted for 21% of the Jollibee Group’s sales for the quarter. 

SSSG of the Philippine business increased by 9.1% (TC + 6.5%; AC +2.4%) fueled by the strong demand from end-of-school year activities and special occasions (Mother’s/Father’s Day). SSSG of the international business was mixed across regions/ brands. EMEA grew by 16.8% driven by Jollibee Vietnam with SSSG of 20.2%. In North America, Jollibee US and Canada grew by 15.7% and 10.3%, respectively, while Smashburger declined by 3.6% but improved sequentially. For the coffee & tea segment, CBTL posted +11.4%, Milksha +6.8% and Highlands Coffee -3.3%, indicating improving macros in Vietnam. China declined by 13.4% during the quarter due to weak consumer spending, reflecting overall industry trends. Overall, SSSG of the international business grew by 4.7%.

The Jollibee Group’s strong revenue growth and cost discipline resulted in a 19.9% increase in gross profit (GP) to P13.1 billion, with significant margin expansion for both the Philippine (+140bps) and international (+170bps) businesses. This produced a robust operating income of Php5.1 billion and a 90bps improvement in operating income margin for the quarter.

Net income attributable to equity holder of the Parent Company (NIAT) and basic earnings per share (EPS) for the quarter increased by 30.8% and 32.2%, respectively.

Jollibee Group Chief Financial and Risk Officer, Richard Shin gave the following statement:

“Overall, our financial performance for the second quarter was even stronger than the first quarter across most metrics. Our top line growth translated to an all-time high operating income of Php5.1 billion and a NIAT of P3.0 billion. Our EBITDA margin expanded 90 bps year-on-year to 14.6% and we generated cash flow from operations of P14.7 billion (+28.5% YoY) and free cash flow margin of 10.9% during the quarter.

As we move into the second half of the year, we remain focused on capital allocation discipline and prioritizing opportunities with the greatest growth potential that will give the best value for JFC and our shareholders.

In July, we announced our planned acquisition of an effective 70% stake in Compose Coffee, South Korea’s most loved coffee chain. Compose Coffee is a strategic fit to the Jollibee Group’s coffee and tea segment and is value accretive. It has superior cash returns and excellent profitability margins with high double-digit EBITDA and EBIT margins due to its capital-light, 100% franchised business model. Further, it will strengthen the Jollibee Group’s Balance Sheet since it has no existing loans nor non-trade obligations. 

Recently, we announced the Jollibee Group’s withdrawal of our previously disclosed public offering of Series C Preferred Shares, following careful consideration of all relevant factors and in the interest of achieving the best value for our shareholders. We have decided to explore other capital raising opportunities, focused on shareholder value and optimization of our capital structure. We believe that the additional funding that would have come from the public offer of the Series C Preferred Shares would no longer be needed for the refinancing of the Series A Preferred shares due mainly to the strong profit performance and cash flow generation of our Philippine business as discussed in this press release. The rate cuts expected to occur later in the year would also allow us to obtain more beneficial bank loans at floating interest rates. We are also reducing our P23 billion CAPEX budget for 2024 by at least 20%, prioritizing our champion brands. Finally, the profit accretive contribution from the consolidation of Compose Coffee will help further increase our cash generation. All these factors and considerations will improve our flexibility in funding and increasing our leverage position.”

​At the end of June 2024, the Jollibee Group’s store network increased by 5.1% compared to a year ago. JFC operated 6,956 stores worldwide: Philippines (3,348) and International (3,608): 567 in China, 383 in North America, 356 in EMEA, 789 with Highlands Coffee mainly in Vietnam, 1,186 with CBTL and 327 with Milksha. Its largest brands by store outlets worldwide are Jollibee with 1,697, CBTL 1,186, Highlands Coffee 789 and Chowking 618.