Shakey’s Pizza Asia Ventures Inc. reported a 33% decline in its net income for the first half of the year, dropping to ₱232 million. The financial contraction was largely driven by rising operational expenses and non-recurring charges related to the reorganization of its Peri-Peri Charcoal Chicken brand.
According to a disclosure submitted to the Philippine Stock Exchange, core net income after tax—which strips out one-time restructuring costs—still posted a 26% year-on-year drop.
The company’s gross profit margin contracted by 100 basis points to 20%, hit by network expansion expenditures, elevated energy and utility bills, and reduced leverage due to weaker same-store sales performance.
Concurrently, operating expenses as a proportion of sales grew by 130 basis points to 13.9%, reflecting heightened investments in marketing campaigns and promotional activities to stimulate demand.
The earnings slump unfolded against a challenging domestic economic backdrop. Discretionary household spending weakened in the second quarter following an inflation uptick caused by escalating global oil prices tied to Middle East tensions. Consequently, same-store sales dipped 1% during the six-month period.
Despite these market hurdles, overall multi-brand system-wide sales surged 12% year-on-year to ₱13 billion, propelled by rapid outlet growth. Consolidated revenue also moved up 9% to ₱8.2 billion.
On a quarter-on-quarter basis, business momentum picked up in the second quarter, with both system-wide sales and top-line revenue rising 4% over first-quarter figures, buoyed by seasonal spending around graduation events as well as Mother’s and Father’s Day celebrations.
The group opened a net total of 35 new locations in the second quarter, bringing its first-half net additions to 104 outlets. The expansion pushes the firm’s global portfolio to 3,074 locations, covering its primary store concepts: flagship Shakey’s Pizza, Potato Corner, and Peri-Peri Charcoal Chicken.
Chief Executive Officer Vicente Gregorio indicated that the food chain operator will now implement a more disciplined and cautious approach toward store growth while concentrating on profitability restoration.
Gregorio pointed out that while mature flagship brands like Shakey’s and Potato Corner held up well against inflationary headwinds, emerging concepts like Peri-Peri were more vulnerable to the consumer slowdown, prompting executive leadership to reset its store network.
Facing an ongoing market deceleration, the food group is turning its attention to prudent cash management, optimizing its current store footprint, and fortifying its core brand portfolio to secure sustainable growth.