Jollibee Corporation Closes 255 Stores Due to the Pandemic

Jollibee, the company that sought its everlasting domination in the market; knocks off P12 billion from its funds because as one of the most major effects of the infamous Coronavirus Disease (COVID-19).

Jollibee Corporation Closes 255 Storse
This image was taken from ABS-CBN News | news.abs-cbn.com

This P12-billion loss led them to close about 255 stores. For the first half of 2020, it was unexpected from the fastfood giant. According to reports, half of the stores of Jollibee in the whole world have been temporary closed during the second (2nd) quarter.

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Huge Sales Loss for JFC

One of the particular reasons why Jollibee Corporation closes 255 stores is the fact that it saw a decrease in the sales; leading them to have about a 48.8% decrease in the sales.

This percentage translated P30.7 billion – and if you think these figures are all inaccurate, this was from their financial statement dated August 5th, 2020.

Furthermore, at the end of the quarter, the stores that closed had 88% of reopened; only with a limited capacity. The problem is that there were no dine-in customers; it was catering only to the needs of customers who are for delivery, take out, and drive-thru services.

In addition to that, the Jollibee Corporation says that a year to date, the revenues saw a decline of P62.8 billion which was 25.3%; and sales fell to P85.8 billion – at 24.5%.

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Rebuilding a Business

Ernesto Tanmantiong, Chief Executive Officer (CEO) of Jollibee Foods Corporation (JFC), said that the results of their business has been bad. However, they have their focus on rebuilding the business – making it rise again.

The business results were very bad but in line with our forecasts. We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our business transformation program.”

The move about  Jollibee Corporation closes 255 stores is a part of the business transformation. Moreover, there would be other changes and modifications as well – and it can include a myriad of things you didn’t expect.

The spending for business transformation includes closure of 255 company-owned stores; change in ownership of 95 stores from company to franchisees; payment of pre-termination penalties of stores in the US and China; closure of supply chain facilities; and reduction in the size of the organization in various countries where we do business.”

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Apart from that, other strategies that the company looks to have include:

  • Opening new stores in China, Malaysia, Vietnam, and in North America;
  • Launching of Cloud Kitchens;
  • Introducing and Innovating on New Products;
  • Improving Delivery Systems; and
  • Many More

Their goal, their goal is to have a target of opening 338 stores within the year. This move is to offset the closure of around 255 stores worldwide.

Significant Increase in Profit

Jollibee CEO Tanmantiong said that they are expectant of a rise in sales in the year 2021. This would be a point a lot closer within the results that 2019 gave them.

We expect sales and profit to increase significantly in 2021 to a point closer to the levels of 2019 and to grow at least at historical growth rate of 15% annually by 2022.”

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This is, after all, at par with what Claire T. Alviar, Philstocks Financial, Inc. Research Associate said; which was that though the financial data of the Jollibee Corporation weren’t all that good, it’s still better than others amidst whatever’s happening at the moment.

JFC’s financial performance is expected to be bad and could possibly record a net loss for the full year of 2020, but recovery outlook for next year, starting this third quarter, makes this stock still attractive to investors along with its strong balance sheet in this time of pandemic.”

Rise of Jollibee’s Shares

While the Jollibee Corporation closes 255 stores, how come their stocks see a rise? Shouldn’t it be the other way around? Well, because of some traders and some bargain hunters, Jollibee shares saw an increase of 3.8% even if their losses are unbearable.

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Are they doing well?

That doesn’t mean, though, that Jollibee is doing well. It still needs a lot of modifications and alterations in order for it to get to where it intends to be; and the company needs to see a lot of improvement and development.

Are you a fan of Jollibee, or maybe whatever their products are? Have you been patronizing them ever since you were a child? Jollibee is indeed one of the country’s favorites; and it is sad to know that they are closing their stores.

One thing is for certain, though, they plan on bouncing upwards again next year and you should not worry about their losses.

Source/s: Rappler | Business World Online

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