Max’s Group Reports First Quarter 2017 Financial Results
Max’s Group Inc. (‘MGI’, the ‘Company’) systemwide sales rose 10% to P3.93 billion for first quarter 2017 from P3.58 billion for first quarter 2016. Topline growth came in at 9% to P2.91 billion from P2.68 billion as of 31 March 2016. Restaurant sales increased 4% to P2.42 billion from P2.32 billion driven by new store openings and stable same store sales performance. Commissary sales grew 40% to P311.44 million from P222.16 million owing to additional franchised outlets. Meanwhile, revenues from new franchises, royalty and continuing license fees was up 34% to P180.12 million compared to P134.37 million for first quarter 2016 mainly due to a larger recurring income base. Cost of sales improved to 76.1% from January to March 2017 as opposed to 76.3% from January to March 2016. The Company withstood the effects of higher input prices and distribution expenses. As a result, Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at P350.94 million resulting to a net income of P175.98 million, up 8% versus P162.32 million year-on-year.
“We are off to a relatively solid start for the year notwithstanding the challenging commodity pricing situation. While we expect to encounter some more of these headwinds, we will continue to push forward with our strategies,” said Robert F. Trota, President and Chief Executive Officer of Max’s Group, Inc.
For the quarter, Max’s Group opened 18 new stores including 3 branches abroad among which are Yellow Cab Pizza in Qatar and Hawaii as well as Max’s Restaurant in San Diego, summing its total network count to 632 outlets with 51 located overseas. The Company plans to rollout around 60-70 stores for 2017.
On the international front, MGI was able to secure its first development agreement for the year, with a commitment to establish 10 Yellow Cab Pizza stores in Brunei and 5 Yellow Cab Pizza stores in East Malaysia over the next 5 years.
“Our objective is to bulk up and at the same time operationalize our existing pipeline,” stated Mr. Peter H. King, Chief Executive Officer of Max’s Group International.
For the period, the Company centered on tactical marketing campaigns to strengthen brand mileage and entice awareness for new products. MGI likewise reinforced its raw material sourcing activities to mitigate impending price movements.
“We recognize the need to enhance our capabilities to future-proof our business. We are positive that the overall economic climate will remain supportive,“ concluded Mr. Trota.