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(Bloomberg) — Jollibee Foods Corp. tempered store expansion and spending targets for the year, as the Philippines’ largest fast-food group navigates a higher cost environment amid the Middle East conflict.
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The company that’s known for its fried chicken and sweet spaghetti is now looking to open 1,000-1,100 new stores, lower than the 1,200-1,300 outlets planned earlier, according to a statement to the stock exchange on Tuesday.
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Capital expenditure is expected to be around 13-15 billion pesos ($212 million-$245 million), from an earlier plan of as much as 16 billion pesos announced in March. Operating income growth is seen to range 10% to 15%, from 15%-18% previously.
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The new assumptions reflect “ongoing portfolio optimization and the timing of store openings and closures” against the backdrop of a “still-dynamic cost environment,” the company said.
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The fresh plans come even as Jollibee’s second-quarter performance showed a business that’s recovering from a 39% profit slump in the first quarter due to soaring inflation.
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Net income during the April to June period rose 5.7% to 3.4 billion pesos as revenue jumped 10.7% to 85.9 billion pesos.
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Jollibee’s shares closed 5% higher on Tuesday, the most in more than a month. The Philippines’ main stock index gained 0.6%.
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“The second quarter represents an important step forward in our earnings momentum,” Chief Financial Officer Richard Shin said. “Pricing actions implemented beginning in April, together with productivity, sourcing, and cost discipline initiatives, contributed to the recovery in gross profit margins.”
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The company’s portfolio includes 20 brands with over 10,700 stores and cafes across 33 countries, including US, China, Vietnam and Canada.
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English (US)