Jollibee Foods Corp. expects its Smashburger business to become net positive by next year.
Richard Shin, Jollibee’s Chief Finance Officer, mentioned that the brand, with its 230 stores, is meeting internal targets, boosting confidence in its profitability.
Currently, Smashburger is profitable at the pre-income tax level, with earnings before income tax.
“We’re very excited about Smashburger’s progress. The numbers show improvements in average daily sales and other metrics,” said Shin.
Jollibee recently appointed a former Starbucks executive to lead the burger chain, aiming to expand into the U.S. hamburger market alongside its flagship brand, Jollibee.
In March, Jollibee announced the appointment of Denise Nelsen as Smashburger’s Chief Executive Officer.
“Nelsen has over 30 years of experience in the food and beverage industry, including 25 years at Starbucks. Her expertise will help drive culinary innovation, enhance guest experiences, and expand Smashburger’s market presence,” Jollibee stated in March.
Shin highlighted that Smashburger, along with Jollibee, Coffee Bean and Tea Leaf, and Tim Ho Wan, are crucial for increasing the company’s overseas revenue to half of its total revenue, which is currently at 40 percent.
The key markets for Jollibee’s growth include the United States, China, and the Philippines.
Jollibee initially invested in Smashburger, known for its Certified Angus Beef burgers, in 2015 and gained full control in 2018.
Jollibee closed the first quarter of the year with a profit of P2.62 billion, a 26.9 percent increase from P2.06 billion last year.
Revenue grew by 11.3 percent to P61.3 billion from P55.09 billion, with system-wide sales reaching P86.8 billion, a 10.4 percent increase from P78.6 billion.
Same-store sales growth (SSSG) was at 5.5 percent. Shin stated that the group is slightly ahead of its projected growth rates.
Previously, Jollibee projected a 10 to 14 percent increase in system-wide sales, with SSSG growing between 5 and 7 percent.