Jollibee projects 12% sales growth this year

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) is eyeing a 12 percent rise in systemwide-sales this year as it accelerates the pace of new store openings in both the local and international markets, a top company official said.

Out of the projected 12 percent growth rate, seven percent is expected to come from store expansion while the remaining five percent will come from same store-sales growth, the executive, who requested anonymity said.

Systemwide sales, which measure revenues from both company-owned and franchised stores, grew 12.4 percent in the nine months to September last year to P75.22 billion.  

The JFC official said the company plans to open at least 220 new outlets this year from the targeted 200 in 2013 as it seeks to further widen its presence and boost sales.

The group’s Philippine business is seen to grow by 10 percent this year.

Analysts, however, expect JFC’s margin growth to slow down due to a depreciating peso and an expected increase in commodity prices by two to three percent.  The impact, however, should be minimal as only 20 percent of JFC’s raw materials are imported.

The fastfood giant has yet to firm up its 2014 capital budget but the figure is most likely to exceed last year’s P5.5 billion.  A big chunk of the programmed capital outlay will go to new stores and renovations.

JFC operates the country’s largest food service, with a total of 2,040 stores as of end-September 2013. Its network  include Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King.

For its overseas operations, the company had 541 stores as of the same period. Aside from the Jollibee chain, the group’s other  food brands include Yonghe King, Hong Zhuang Yuan, San Pin Wang, Red Ribbon, Chowking and Chow Fun. 

JFC management expects the China business to make some headway by end this year or early 2015 as it steps up expansion to hit the targeted 500-store network.  While the China business is profitable on a per store basis, the company is still operating at a loss on an aggregate level. 

The group aims to become the largest restaurant group in Asia as early as this year, exceeding Japanese food service firm Yoshinoya, which is averaging $2.5 billion in sales every year.