Shakey’s net profit up 27.3% on new-store openings

Shakey’s Pizza Asia Ventures Inc. said third-quarter net profit rose 27.3% to P176.38 million as revenue grew in the double digits, in part after the opening of new stores.

Revenue — including net sales, royalty and franchise fees — rose 13.3% to P2.04 billion, according to results submitted to the stock exchange Friday.

In the nine months to September, Shakey’s reported an 11% increase in net profit to P594 million as the full-service restaurant group opened new stores and folded in another restaurant brand.

“We are pleased with the results of our initiatives to trim down unnecessary expenses and run a leaner, tighter ship. Year-to-date, raw materials have also moved in our favour adding extra upside to our margins. Nonetheless, we are bracing ourselves for a more challenging year-end with some of our main input costs on an upward trend,” Vicente L. Gregorio, Shakey’s president and chief executive officer, said in a statement.

The group earned improved margins from various efficiencies and lower costs. It said sales were boosted by the consolidation of Peri-Peri Charcoal Chicken beginning June 1.

Systemwide sales, which covers both company-owned and franchised stores — grew 9% in the nine months to P7.4 billion due to store openings in second-tier cities.

Same-store sales growth (SSSG), however, remained flat with Shakey’s not raising prices. The company said competition, particularly in delivery, has also heated up.

“Same-store sales remain challenged by promotion-heavy programs of various industry players. We are also lacking this year the positive SSSG impact of price increases, which had contributed close to half of same-store sales growth in previous years. Nonetheless, we believe this is a short-term phenomenon and remain optimistic about the long-term prospects of food service in the Philippines,” Mr. Gregorio said.

“We will continue to open new stores, especially in second tier cities where we are still seeing many opportunities. For Peri, we are quite encouraged by the market’s reception and will be more aggressive in opening stores to meet unserved demand,” he added.

On Friday, Shakey’s rose 0.85%, closing at P11.92. — Victor V. Saulon