Jollibee Foods Corp. expects to bounce back from a negative bottomline by next year on efforts to curb the impact of the economic slowdown due to the coronavirus disease (COVID-19).
The company expects 2021 bottom line to match last year’s P6.8 billion.
Jollibee is embarking on a P7-billion rationalization plan, market analysts said.
Last week, Jollibee reported a P1.79 billion loss for the first quarter this year, reversing from a P1.46 billion profit last year. Revenue fell 2.3 percent at P39.43 billion from P40.35 billion last year while systemwide sales (SWS) was up by 1.6 percent.
Stockbroker SB Equities Inc. said the temporary closure of Jollibee stores globally led for the same-store sales contraction of 5 percent.
“Management expects the second quarter to be worse than the first quarter given more days of store closures with limited delivery sales. However, it remains confident of a recovery in fiscal year 2021, after its P7 billion store and facility rationalization program this year.
“We believe any recovery will depend on how fast the domestic market can recover as Jollibee’s earnings are still largely driven by the domestic business,” it added.
SB Equities said as shared by Jollibee executives, the COVID-19 pandemic drastically dragged company sales.
“January sales rose 24.9 percent, February sales were up 15.7 percent while March sales fell 32.5 percent. In terms of SSSG (same store sales growth), it saw SSSG of +3.6 percent in January, -1.6 percent in February and -30.8 percent in March,” SB Equities said.
It said the slump in March SWS was brought about by a huge number of store closures mainly in the Philippines (69 percent), North America (16 percent), and Europe, Middle East and Asia (23 percent), as well as of Coffee Bean & Tea Leaf (32 percent) outlets.
“Recall that the domestic business represented 71 percent of SWS in fiscal year 2019; since the delivery business in the Philippines is only around 7 percent of SWS, the store closures resulted in a huge dent in overall SWS in the first quarter,” it added.
Abacus Securities Corp. in an investors’ note said Jollibee expects the recovery to be slow given the fact that its domestic target markets (class C and informal workers) are among the worst affected while expressing concern on overseas Filipino worker remittances.