Jollibee earmarks P9.1B to open 330 stores in 2015

MANILA, Philippines – The jolly, striped red and yellow bee is set to conquer more destinations in 2015, as Jollibee Foods Corporation is earmarking P9.1 billion ($205.51 million) in capital expenditures (capex) this year.

The fastfood giant upped its capex by 68.5% from P5.4 billion ($121.94 million) mainly to open more stores in the Philippines and abroad.

In a disclosure to the stock exchange, Jollibee said it plans to open 330 stores for 2015 – 220 in the Philippines and 110 overseas.

At least P6.7 billion ($151.31 million) of the capex will be for Philippine stores; P1.7 billion ($38.31 million) for China; and the balance will go tio US, Southeast Asia, and Middle East markets.

In 2014, Jollibee opened 234 stores, of which 169 were in the Philippines and 65 were in foreign sites.

Jollibee operates the largest food network in the Philippines with 2,301 stores, based on end-2014 data. Apart from its flagship brand Jollibee, it also owns Chowking, Greenwich, Mang Inasal, Red Ribbon, and Burger King.

Overseas, it operates a total of 612 stores.

Jollibee is one of the top 10 fast food or fast casual chains in the US, according to the food website, The Daily Meal.

Although no opening date has been set yet, Jollibee has confirmed its first Chicago suburb, Illinois, US outlet in Skokie’s Touhy Marketplace, the Chicago Tribune reported on February 10. 

Also in December 2014, Jollibee entered into a joint venture agreement with Jasmine Asset Holdings Ltd., to operate Dunkin’ Donuts restaurants in selected territories in China.

Recovering

Jollibee is accelerating its capital spending at it posted 12.7% increase in net income for 2014 to P5.26 billion ($118.77 million) versus P4.67 billion ($105.45 million) recorded in the same period a year ago.

Its system-wide retail sales also grew 13.3% in 2014 to P117.89 billion ($2.66 billion) versus P104.09 ($2.35 billion) billion in 2013. System-wide retail sales is a measure of all sales to consumers both from company-owned and franchised stores.

An 8% same store sales growth for the local and overseas operations and a 5.4% growth in store network boosted Jollibee’ sale growth in 2014.

The increase in price of raw materials, including higher general and administrative expenses to support information technology-related costs brought pressures on the company’s profit margins, Jollibee chief finance officer Ysmael Baysa said.

In August 2014, Jollibee had to temporarily closed down 72 stores under its umbrella, representing 3.2% of its total store network, because of the limited availability of chicken, burgers and other bestsellers due to its migration to a costly, new IT system.

“We’re now very close to fully covering these cost increases and look forward to the full recovery and improvement in gross profit margins in 2015 through lower cost of energy and more stable raw material prices,” Baysa said. – Rappler.com

US$1 = P44.28