HOMEGROWN fast-food chain Jollibee Foods Corp. (JFC) is managing inflationary pressures via calibrated price hikes and is also maintaining expansion and listing initiatives amid an uncertain business environment.
At an investor briefing last week, Jollibee Group Chief Financial Officer and Chief Risk Offer Richard Shin acknowledged that inventory costs were being affected by inflation and spillover effects from the war in the Middle East.
“We should expect our cost of inventory to be impacted by inflation,” he said, adding that the company had already implemented “measured” price increases beginning last month to help stabilize gross profit margins.
The company does not expect elevated costs to derail expansion plans, however, with Shin noting that borrowing costs were lower compared to store profits.
“Where there’s a market and a demand and good ROI (return on investment), our cost of borrowing is significantly lower than the return,” he said.
JFC continues to push an accelerated franchise-led expansion strategy across several markets with the company noting rising franchisee interest in the United States, particularly for its chicken brands.
Shin said the group had started attracting multi-unit franchise operators seeking to open 50 stores or more.
He added that JFC’s chicken business ranked behind only Chick-fil-A and Raising Cane's in annual unit volume among major players in the chicken quick-service restaurant segment.
The Jollibee Group CFO went on to add that the group’s South Korean coffee chain Compose Coffee was on track to open around 360 franchised stores this year, or roughly 30 stores per month.
Turning to the group’s planned listing initiatives, Shin said inflation would not affect the timetable for a possible listing of Highlands Coffee and that the company was on schedule for a potential initial public offering (IPO) for its international business.
“Absolutely targeting the same date to IPO,” he said, referring to the plans for a listing in the United States.
JFC also signaled continued interest in acquisitions, particularly in the coffee and Chinese cuisine segments, with Shin reiterating that they remain selective in pursuing deals.
He also said that the company was now receiving more acquisition proposals as its scale expands globally, while emphasizing that it continued to prioritize its flagship Jollibee brand and organic growth businesses.
Regarding possible fundraising initiatives, Shin said the group saw no any immediate need to raise additional debt, citing global inflation and interest rate uncertainties.
“There are no plans to issue further bonds,” he said.
Pricing variance adjustments, which had previously caused swings in gross margins, were said to be now largely stable following improvements in forecasting and cost management systems.
JFC shares on Friday rose P0.60, or 0.43 percent, closing at P140.60 each.