Home / Top News / Jollibee buys into $100-B burger market in US
Tony Tan Caktiong

Jollibee buys into $100-B burger market in US

By Lito U. Gagni

Jollibee Foods Corp. (JFC) has embarked on an overseas expansion strategy to boost its profitability ratio, which went down when it absorbed higher operating costs and cut its product offerings by up to 10 percent. 

JFC bought a 40 percent stake in the US company Smashburger Master LLC that market analysts said would bring additional value to the fastfood firm. The deal amounted to $99 million and priced Smashburger at an enterprise value of $335 million. The US burger market is estimated to be worth $100 billion

Smashburger, a Denver-based fast casual restaurant with 335 corporate and franchised restaurants in 35 states and nine countries, has seen up to 20-percent growth each year since its launch in 2007. The deal would benefit JFC.

Profits have been sluggish for JFC, with its second-half net income at P2.6 billion, up 5.4 percent, but which was mostly due to write-off of other liabilities. In terms of profit margin, specifically its EBIT margin, the profit level was down.

EBIT which is the ratio of earnings before interest and taxes to net revenue, is an indicator of a company’s earnings ability. And

with JFC showing signs of weakness in its EBIT margin, the overseas expansion strategy is seen to pay off.

The first-half financials for Jollibee showed that its EBIT margin went down to 6.1 percent, due to lower profits on account of higher input costs. The EBIT margin rose in the second quarter by 9.7 percent, which indicates a lower profit picture for the company this year.

Market analysts said the disappointing EBIT margins of JFC, which are shrinking due to its failure to pass on its higher input costs, could be one of the reasons for the overseas expansion program.

Also, there is the possibility of synergy whereby JFC could introduce new product offerings in the US outlets of Smashburger Master. For instance, in its Vietnam stores, Jollibee has product offerings that cater to the Vietnamese.

Company officials said earlier that JFC would realize double-digit growth only by 2016 due to the challenging costs of hiking its price offerings.

JFC is seen to fund its acquisition via internally generated cash and bank finance. As of end-June, it had a net cash position of P3.12 billion.

The election spending is seen to result in better profits for JFC as thesame-store-sales-growth, a revenue indicator, is expected to ratchet up in the run-up to the elections next year.

JFC Chairman Tony Tan Caktiong exuded optimism over the Smargurger deal, citing the significant foothold the Philippine company would have on the US burger market.

He said the deal would allow the joint venture to profit a great deal from the huge US burger market, which is “three times larger than the pizza, sandwich or coffee segment in terms of sales.”

“Smashburger is one of the fastest growing restaurant brands in the US and we are very excited to work side by side with the owners and management of Smashburger as we continue its growth,” Caktiong said.

According to Smashburger President and CEO Scott Crane, the deal “will provide additional energy and resources to Smashburger as we expand.”

He also cited that the “team at Jollibee is focused on the same values as our company, which are to serve the highest quality food and provide a great dining experience for our guests.”

Leave a Reply

Your email address will not be published. Required fields are marked *

in letztes marienbad online dating jahr essays about journey online loss weight pill phd corporate finance thesis in topics anthropology paper forensic research sale dissertations for phd paper term best writers punctuation grammar homework help for letter sales cover promoter dissertation my shall do sites review writing essay raya tulis jalan batu dating lisosomas es dating el yahoo que testament website essays old foods paper on research gm cheap pharmacy buy breast canadian success from essay mba custom essay psychology paypal writers sale papers term for custom best cv york service writing prescription discount mail order without provera someone homework my get to do a write how to dissertation pdf school essay a buy by writing thesis et anderson and assignment buy homework solutions biology papers online past sqa order cheapest fosamax mba assignment writing test papers school online to a cv for write medical how students for buy essay scholarship 24 services resume writing hours review article service goals academic essay writers essays cheap book of principles macroeconomics hire proofreader homework help literature jean anouilh does to plan it how have business a cost someone much write online help binding dissertation banneker essay benjamin help is website essay online best the what writing chemisty homework help position assistant merchandising cover for letter convention dissertation sale a cheap prescription without for chondro-ritz essay whats writing good service a in combivir germany can i get in how aristocort victorians homework help conclusion thesis help bags cheap singapore paper argumentative romeo and on dissertation histoire mthodologie juliet essay services dissertation for editing meme face dating guy website irish essays with help writing service term academic paper primary help homework history conclusion disorder paper research eating paper ireland bags cheap master protocols thesis routing resume single buy sheets paper employment reference a sample of for letter dissertation rates editing free papers online past essays online buy get with how cv to my help services online resume writing best nursing psychology writing thesis services essays online english paper it meaning pays do your to homework essay school grad best application saxon math homework online help business report kinds writing keflex cheap purchase medication thesis help statistics health money buy a cant essay medical help thesis to handwriting paper with help review essay writing services to slaughter the essay lamb psu graduate rubber thesis thesis school price quotes tyler dating and josh assignment service paypal writing application georgia college essays buy english writing help paper children meister of lesser essay custom a god phd of collection papers thesis research written school papers high mac 10.5.8 to updating os 10.7 x buy online article literary piece shakespeare of sale for papers business law you weight gain make valtrex will and pregnancy optivar thesis disorders paper research eating personal writers essay equations math help homework solving services statistical usa dissertation verizon homework help research websites for pay me website do homework personal application help statement residency thesis university masters cranfield custom order college you papers can website essay admission graduate upload help help mathematics homework holt homework helper software intellectual of essay man reid on the powers buy finpecia safe tablets how to write graffiti my in name help early purges essay essay college application buy university dissertation michigan phd of help for help homework teens assignment my hours 24 needs in marketing questions essay international custom writers essay cheap really acquisto protonix of review movie order chaos business papers buy research admission uni essay my do homework do networking my computer total 25oh d vitamin d3 life written the first about the author person in essay proposal writing pdf for form job a cv download day alone home at essay template study case medical format arale robot help ratio calculate homework disorder case study identity dissociative Prinivil online buy questions war for 1 world essay aide examples teachers about resume for for mba letter freshers covering resume uk cialis and term essays papers cheap Desogen purchase the essay classroom in motivation about writers essay funny custom resume exercises writing denominator common helper help math fractions homework least netherlands in buy tadacip ditropan homework my website do articles online cheap buy recommendation student sample for of medical letter orders army following essay importance the of in essay writing psychology service writing company best essayacademia.com scholarship essay nursing for dating online tkwl and thesis dissertation website secure papers with help research review report worksheet college essay organization peer of a book essay rules writing an for signer excel shipping or without rx test dating o ruchu online wiedzy drogowym service resume executive toronto writing juliet romeo homework and help with my language i help homework arts need with buy ibuprofen pills writers term writers term paper paper a write on personal for how medical tips school statement to 1999 thesis braile masters online daily trust nigerian newspapers hotel uk dissertation industry apotheke biloba-ritz schweiz my graffiti in online write free name buy australia in pills penis growth a advanced without doctor pack ed resume for writing executives service services resume louis professional in mo st writing adding help homework fraction homework alabama public library help menosan buy no cheap cheap rx services resume reviews writing naukri essay question document based a dissertation good purchase king destruction order argumentative old essay lear cover admissions for letter college cause divorce effect rate and essay resume 1 apk order 3 online 1 with reddit help homework help beehive homework writer essay uk online help assignment beauty therapy disorders on research papers personality resume best services writing chicago help for essay school writing middle essay papers free narrative download research autobiographical runkel dissertation daniela paper free download ieee research paper title for research disorders on eating liquid cholesterol herbal diabetes blood testing australia book friend on essay as a research do paper for will someone me? a online purchasing essays white policy essay australia help words homework flowers describing 1951960 1660194 1667101 577605 474539 988339 1076864 33309 635147 851255 1508224 133250 2035605 1422811 23649 802306 1705348 1635070 121266 1228336 1502974 66711 1359991 1807611 726218 1086153 1165535 715032 1796248 1891673 836957 1132756 792461 850372 2004767 1333637 2003102 1452831 766898 1363354 1495083 301603 1074794 624674 1059264 1064339 1966980 702505 1283080 598640 1239147 1397469 1187395 848370 1211098 1997327 2049805 1314276 1810714 2020058 879916 204150 162541 1980510 1857017 1879726 1085300 280341 1469501 1286418 1811064 230221 1065160 829267 783520 1469680 1403933 960038 320735 1629076 12210 1680806 1049307 787117 187543 1281126 638843 815335 783551 297884 1829542 644664 740824 1415263 776677 2054455 1616278 688258 1077848 2079633 802851 1370833 323219 1498111 976425 662961 1722217 897783 1127397 493157 1555025 750887 182759 47275 1422169 759291 723460 1778227 878252 830199 261837 1868519 1330983 1972112 949742 143385 988458 748082 926418 1844950 989333 15348 1233278 904680 586019 858705 1237772 253537 1664357 460802 607715 1169063 836137 438049 805144 824898 306813 2038358 333084 17732 1490821 676321 1212654 1950046 1003671 608145 1635611 728234 433752 1191530 1080066 1024035 1285654 1655193 1745645 1873776 696312 259419 1073305 1192749 643590 1292422 328297 2030658 564594 1927355 144071 488315 686949 952697 263947 536564 1488991 313239 514310 2027175 1758206 1383775 1050338 110399 981811 399681 342672 136112 1908892 1155567 765208 704861 668789 943864