Shakey's Pizza Asia Ventures, Inc.'s Q12024 Systemwide Sales Grew by 15%; Net Income After Tax (NIAT) Stood at P171 Million

Shakey's Pizza Asia Ventures, Inc. (SPAVI), one of the Philippines' biggest chain restaurant and food service groups, has reported its unaudited financial results for the first three months of 2024. Systemwide sales were P4.8 billion, up 15% from the high base in Q12023. This result was aided by the group's network growth strategy and consistent same-store sales.

In terms of profitability, Q12024 net income was P171 million, down 15% year on year, owing to higher operating expenses from organizational and sales-generating initiatives. As margins improve due to locked-in raw material costs, SPAVI anticipates an increase in net income in the second half of 2024, with full-year profits climbing in the mid-teens.

Vic Gregorio, SPAVI President and Chief Executive Officer, said, “Our Group remains optimistic with a healthy dose of caution when it comes to our outlook. Given that we have been operating in a strained consumer environment and are coming from a high base due to the reopening, we are grateful to be able to deliver double-digit topline growth, which we expect to be sustained for the balance of the year.”

He continued, “Our guests were more careful about when and how they choose to spend their money. They sought even more value. Therefore, it was crucial for us to ensure that our brands remained relevant through compelling offers and programs to sustain sales.”
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During the first quarter, SPAVI's gross margins increased by 160 basis points to 23.3% as commodity prices fell since the end of 2023. Gross revenues totaled P719 million, up 15% from the same period last year.

Anticipating gross margin gains and recognizing the need to provide value to guests in a soft consumer market, the group engaged in topline development and brand building operations to better capture demand.
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In keeping with SPAVI's strategic commitment to investing in its brands, Shakey's and Peri-Peri created the Supercard Super Cars campaign to increase brand salience and loyalty. Three lucky registered Supercard users received one BMW apiece following a series of draws. The Supercard, SPAVI's premier loyalty program, strives to provide additional value to loyal customers across the group's multi-brand portfolio. The Supercard currently has over 2.2 million users countrywide.
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Meanwhile, Potato Corner (PC) doubled down on partner franchisee involvement with the recently finished Golden Fries Awards and current Franchise Roadshow. The Golden Fries Awards highlighted PC franchisees' outstanding performance in nurturing excellence and fostering long-term brand loyalty and commitment. The PC franchise roadshows, which are held countrywide across the brand's over 700 franchisee networks, allow SPAVI to promote entrepreneurship by improving the knowledge and abilities of franchisees, the majority of whom are small and medium-sized businesses.

Combined with ongoing investments in systems and the organization since Q32023 to support local and foreign expansion, operating expenses climbed to P472 million in Q12024.
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Given this, profits before interest, taxes, depreciation, and amortization (EBITDA) decreased by 10% to P412 million. Net income after taxes was P171 million, with NIAT margins of 5.5%.
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SPAVI ended the quarter with 2,232 stores and outlets in its global network. During the period, the group expanded its network by 91 units.

According to Gregorio, the Group’s network expansion program is progressing at a healthy pace. “We continue to capitalize on our brands’ attractive returns, which will support our Group’s growth performance moving forward.”

As at end March 2024, Shakey’s, the leading full-service chain restaurant in the country, had 268 outlets. Potato Corner, the country’s top food kiosk brand, had 1,874 stores and outlets. Meanwhile, the network of the Group’s non-fried chicken chain, Peri-Peri Charcoal Chicken and Sauce Bar, stood at 76 units, while other incubating brands, R&B Milk Tea and Project Pie had a total of 14 units. Approximately 13% of SPAVI’s network were international stores.

According to Gregorio, SPAVI will be expanding its network footprint by 400 units in 2024.

Gregorio continued, “While we had a challenging start, SPAVI has been reaping the benefits of a more diverse, multi-brand portfolio. As we move into the succeeding quarters, we expect our profitability to improve with tailwinds from easing commodities and improving OPEX as a percentage of sales. Furthermore, store network expansion will be financially accretive to the Group.”

“Thus, overall, we are on track to deliver topline growth in the mid-teens territory, and we expect profits to grow at the same pace as sales. While it will be yet another difficult year for us in the discretionary space, at SPAVI, we remain focused on building our portfolio of WOW brands for long-term, sustainable growth – guided by our strategical pillars of investing in our brands, our stores, and our people,” he concluded.