Jollibee seen sustaining earnings growth this year

JOLLIBEE Foods Corp. (JFC) will likely continue its growth trajectory this year on the back of global store expansion and sustained domestic momentum, Maybank Investment Banking Group said.

Maybank, in a report last week, said JFC’s earnings before interest and taxes would likely expand by 10 percent and net income by 17.8 percent as it ramped up expansion plans, both locally and internationally.

The fast-food chain operator is setting aside a capital expenditure (capex) budget of up to P23 billion this year and expects to open 700 to 750 owned and franchised outlets, increasing its store network by 7 to 8 percent.

“This is in line with our 2024 forecast of 525 net store openings,” Maybank said.

JFC’s sustainable earnings growth momentum “reinforces our positive view on the stock,” it added.

The Tanmantiong-led fast-food giant, which was operating a total of 6,885 stores as of end-December 2023, is the investment bank’s “top pick” for the Philippine consumer sector.

JFC saw its net income last year grow by 22.4 percent, to P8.99 billion from P7.34 billion, following “all-time high” revenues of P244.1 billion in 2023, up 5.2 percent from P211.9 billion previously.

The Philippine business, which accounted for 61 percent of the firm’s consolidated systemwide sales (SWS), booked a 17.6 percent increase in SWS, while the international business climbed by 14.4 percent.

“Strong-top line growth and cost efficiency drove the operating leverage of the domestic business, such that GPM (gross profit margin) for the Philippines business rose 50 [basis points] year-on-year to 19.1 percent,” Maybank said.