Jollibee Foods Corporation

Q2 revenue was PHP 78 billion, up 15.5% year over year. System-wide sales grew 19.6%; gross profit growth was 13.1%; NOI growth was 19.1%; and NIAT was PHP 3.2 billion, up 5.6% year over year. For the first half, management said NIAT totaled PHP 6.1 billion. Management also said Q2 free cash flow margin was 10.3% before lease payments and 6.6% after lease payments, with underlying EBITDA margin in the 14% range. For 2025, guidance was left unchanged: system-wide sales and same-store sales growth are tracking ahead of plan, CapEx is guided at PHP 5.6 billion, and operating income growth is running above the guided range.

Richard Shin framed the quarter as evidence that Jollibee’s multi-brand, multi-market model is working, highlighting the company’s exposure across chicken, coffee and tea, better burgers, and Chinese cuisine rather than dependence on one brand or one market. His tone was confident and constructive, with repeated comments that second-half results should be as strong as or better than the first half, especially in China, Smashburger, and pricing-driven margin improvement in the Philippines. He also emphasized a 2028 goal of tripling NIAT and said the company is positioned to keep scaling through asset-light franchising and disciplined capital allocation.

Shin said the company is intentionally shifting toward a more debt-heavy structure, moving from roughly 66% debt / 34% equity to about 90% debt / 10% equity to lower WACC and widen the ROIC spread. He cited refinancing of a USD 396 million perpetual bond: USD 96 million was converted into peso debt, and the remaining USD 300 million was refinanced as senior debt at 5.4%, versus the prior 3.9% coupon. He also said Compos Coffee was partly funded with term debt and cash on hand, that Compos is expected to deliver 36% ROIC, and that new investments are running around 10.5% ROIC. On cash, he said free cash flow margin was 10.3% before leases and 6.6% after leases, while CapEx remains within guidance and the company is well below covenants.

Analysts pressed management on whether same-store sales growth could hold up if macro uncertainty worsens; Shin said the company is not changing guidance and expects the back half to be as strong or better, helped by moderate pricing actions. Questions on Smashburger focused on why sales improved, when profitability might turn, and whether store locations were still an issue; management said the brand is being reset through new leadership, the Summer of Smash campaign, and continued natural exit from poor leases, with refranchising expected to make profitability follow quickly. On costs, Shin said margin pressure came mainly from inventory inflation and the company’s choice not to pass all inflation through immediately, while labor and minimum wage increases in the Philippines were described as nominal in impact.