Jollibee Foods Corporation

Q2 revenue was PHP 78 billion, up 15.5% year over year. System-wide sales grew 19.6%, gross profit gearing was 13.1%, NOI/operating profit growth was 19.1%, operating margin was 7.8%, and NIAT was PHP 3.2 billion, up 5.6% year over year. For the first half, NIAT reached PHP 6.1 billion. Management said system-wide sales, same-store sales growth, network growth, and operating income growth are all tracking at the high end or above prior guidance, and CapEx guidance remains PHP 5.6 billion. The company reiterated that it is not changing guidance and expects the back half to be as strong or better.

Richard Shin’s core message was that Jollibee is proving its multi-brand model can deliver growth across markets and categories, not just in the Philippines. He emphasized an asset-light, franchise-led path for China and Smashburger, continued international expansion, and the view that the company is building a stronger ROIC-to-WACC spread through disciplined capital allocation. His tone was confident and upbeat, especially on the second half, with repeated comments that performance should improve and that the company remains on track for its long-term 2028 NIAT target.

Shin highlighted that Q2 revenue reached PHP 78 billion, gross profit gearing was 13.1%, NIAT was PHP 3.2 billion, and first-half NIAT was PHP 6.1 billion. He said the company is deliberately shifting toward a 90 debt / 10 equity capital structure, partly through refinancing a $396 million perpetual bond, including converting $96 million into pesos and refinancing the remaining $300 million at 5.4%. He also said free cash flow margin was 10.3% before lease payments and 6.6% after lease payments, underlying EBITDA margin remained in the 14% range, CapEx is within guidance, and leverage is below covenant levels.

Analysts pressed on whether stronger first-half SSSG and operating profit should lead to raised guidance; management declined to change guidance but said it is very confident the company will finish at the high end of the range. Questions on Smashburger focused on the turnaround timeline, store location issues, and profitability; Shin said the brand is now “night and day” versus three years ago, that most of the worst locations have already been exited, and that franchising and nontraditional venues should drive a faster improvement. On margins and cost pressure, management said the main drag was higher inventory cost and that the company is choosing to absorb some inflation rather than fully pass it through, while on labor and A&P it said wage increases were immaterial and A&P should be similar as a percentage of sales for the full year.