Max’s Group profit down 88%

MAX’S Group, Inc. reported that its first-quarter earnings fell by 88% to P42 million from P337 million amid lockdown restrictions.

“We are very excited with our first quarter results despite the January lockdown, as they gave us indication of the shape of what’s to come for Max’s Group. We have not experienced a full quarter without any lockdown restrictions since the start of the pandemic, and the coming months will give us a better picture of the full realization of the company’s business revolution over the last two years,” Max’s Group President Ariel P. Fermin said in a statement on Thursday.

System-wide sales, composed of sales generated by both company-owned and franchised stores, increased by 25% to P3.55 billion from P2.84 billion.

“Our results for the first quarter, even more markedly so in March, are an indication of strong demand for our brands and patronage of our core of core, which are available both in traditional brick-and-mortar spaces, and expanded to business-to-business and off-premise platforms,” Max’s Group Chief Executive Officer Robert Ramon F. Trota said.

Revenues likewise climbed by 18% to P2.17 billion from P1.84 billion in 2021.

“Local sales were still tempered as a result of the strict lockdown in January due to the Omicron surge, while international business continues to flourish, surpassing even pre-COVID levels,” the company said.

Among its core brands, Max’s Restaurant, Pancake House, Yellow Cab Pizza Co., and Krispy Kreme all realized an upturn and are expected to further realize gains as dine-in customers continue to return.

“As planned, our dine-in brands Max’s and Pancake House, which have been managed for profitability during the pandemic, realized significant growth towards the back-end of the quarter. We are expecting that as the market continues to open up, the recovery of these brands will be even more vibrant, giving our margins a boost,” Mr. Trota added.

Over the course of the pandemic, the company said that it pivoted its business model through remastering the fundamentals of its operations, backed up by tighter, more efficient box economics that allowed them to benefit from both higher margins and a lower break-even point.

“We also continue to expand our reach and market not only though brick-and-mortar stores but across all available channels, such as cloud kitchens, retail outlets, and e-commerce platforms. After squeezing three years of transformation into three quarters of execution, we are confident in the momentum we’ve built and are proud to see the results of the fruits of our labor,” Mr. Fermin said.

He said the group is cautiously optimistic in the “transformative possibilities” for Max’s Group for the rest of this year and the next three to five years.

“The execution of our strategy will have long-term benefits for the group as we nurtured demand from our fans, while crafting an economic model surpassing the margins of our pre-pandemic levels,” Mr. Fermin added.

As of March 2022, the company’s store network reached 14 territories, with 603 Philippine sites and 62 stores across various locations in North America, the Middle East, and Asia.

Max’s Group’s other brands include Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, Sizzlin’ Steak, Maple, Max’s Kabisera, Le Coeur De France, and Singkit.

At the stock exchange on Thursday, Max’s shares remained unchanged at P5.50 apiece. — Luisa Maria Jacinta C. Jocson