Jollibee Foods Corporation swung to profitability in the first quarter of 2021 as it posted a P49-million net income, reversing its P1.95-billion net loss year-on-year.
In a disclosure to the Philippine Stock Exchange on Wednesday, May 12, Jollibee said its operating income reached P1.5 billion in the first quarter despite a 13.4% decrease in systemwide sales to P47.78 billion.
Jollibee's Philippine business sales declined by 21.3%, attributed to the lockdown in the Greater Manila Area. Temporarily closed stores increased by 4 percentage points to 6% by the end of March.
Its international business sales, meanwhile, were up by 1.3%. Store sales growth in its China market accelerated by 47.8%, while North America reached 14.3%. Jollibee cited the faster and wider coverage of COVID-19 vaccination as well as the more significant assistance provided by the governments in these regions.
"Our profit and cash flows recovered strongly versus a year ago, reflecting the successful execution of our business transformation program. Practically every cost item in our company, from stores to commissaries to support group offices, decreased far more than our sales decline," said Jollibee chief executive officer Ernesto Tanmantiong.
The recovery program led to the shutting down of 486 stores worldwide, leading to layoffs. Adjustments in selling prices were also implemented in the fourth quarter of 2020 and the first quarter of 2021 to partly offset the impact of inflation.
The fast-food giant's deferred tax assets were also reduced by P629 million, thanks to the Corporate Recovery and Tax Incentives for Enterprises Act, which lowered corporate income tax.
During the first quarter, Jollibee opened 79 new stores, 19 of which are in the Philippines. A total of 76 stores closed permanently – 18 in the Philippines and 58 abroad.
As of March 2021, Jollibee operates 5,827 restaurants, including its other brands like Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, and Panda Express.
Abroad, it operates Yonghe King, Hong Zhuang Yuan, Dunkin' Donuts, Tim Ho Wan, Highlands Coffee, SuperFoods, CBTL, Smashburger, and Hard Rock Cafe. – Rappler.com