Shakey’s net profit falls 35% on store closures

shakeys net profit falls 35 on store closures - Shakey’s net profit falls 35% on store closures

SHAKEY’S Pizza Asia Ventures, Inc. (Shakey’s) posted a 35% drop in net income for the first quarter as operations in its restaurant chain were halted by the Luzon-wide lockdown in March.

In a statement Monday, the restaurant chain operator said its net income fell to P114 million in the three-month period as gross revenues ended flat at P1.83 billion.

It noted it was recording a 21% systemwide sales growth in the first two months of the year, but it dropped in the following month with the implementation of quarantine restrictions in relation to the coronavirus disease 2019 (COVID-19) pandemic.

Only 9% of Shakey’s network of 290 stores were operational in the second half of March, and these stores were only servicing delivery and carry-out customers. Shakey’s ended the quarter with systemwide sales of P2.3 billion.

“The temporary closure of a significant number of our stores, combined with the impact of operating leverage and various fixed costs, dampened our bottom line during the period. We expect the second quarter to be worse, possibly the most challenging I’ve experienced in my career, as we feel the full effects of limited operations and incremental costs due to the crisis,” Shakey’s President and Chief Executive Vicente P. Gregorio was quoted in the statement as saying.

But he noted the company has made efforts to gradually reopen its store network. Some 256 stores or 91% of Shakey’s network have already resumed operations.

“We are grateful that our multi-channel and multi-format approach…has allowed us to weather through the challenges… We were able to re-open stores located outside malls early into the quarantine period, and our existing delivery and carry-out platforms gave us a strong base from which to build and support the growth in in-home food consumption,” Mr. Gregorio said.

“All these, I believe, put Shakey’s in a good position to bounce back, macro environment permitting,” he added.

Shakey’s stores that are not located in malls make up 46% of its store network. Sales from delivery and carry-out services made up 37% of its total sales for the period.

“We are… taking a more prudent approach over the next few months… In the meantime, we will continue to enhance and invest in existing delivery, digital, and carry-out platforms — building on what we have, as well as introducing new and exciting innovations,” Mr. Gregorio said.

Shares in Shakey’s at the stock exchange grew 27 centavos or 4.66% to P6.07 each on Monday. — Denise A. Valdez

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