Shakey’s narrow Q3 losses bolster future growth expectations
Ian Nicolas Cigaral (Philstar.com) – November 11, 2020 – 6:11pm
MANILA, Philippines — A “gradual” recovery in consumption emerging from lockdowns narrowed Shakey’s Pizza Asia Ventures Inc. financial losses in the third quarter, fueling hopes growth is within reach in the last three months of the year.
In a disclosure to the stock exchange on Wednesday, the company behind Shakey’s Pizza and Peri-Peri Charcoal Chicken reported a net loss of P172 million from July to September, smaller than P403.5 million net loss in the second quarter, but a reversal of last year’s P161.8 million net income.
With year-on-year fall already expected because of pandemic, investors appeared to have welcomed the news of a narrower deficit. On Wednesday, shares in Shakey’s rallied 8.79% to close at P8.44 each.
In the first 9 months, Shakey’s posted a net loss of P462 million, also swinging from P550.4 million same period a year ago.
“Though there remain challenges in the overall environment, we are nevertheless pleased to see a gradual improvement in demand,” Vicente Gregorio, company president and chief executive, said.
“Our recovery rate in the third quarter has been better than expected, mainly driven by the sustained healthy growth of our off-premise business and a marked improvement in dine-in sales,” Gregorio added.
In June, the government started relaxing strict movement restrictions and allowed restaurants in areas with low infection rates to resume dine-in services at limited capacity in a bid to revive the economy. That decision provided opportunity for restaurants like Shakey’s to recoup some gains, with the company posting a system-wide sales of P1.4 billion in the third quarter, up 56% year-on-year.
But that was not enough to push up year-to-date same-store sales, which fell 28% annually. Moving forward, Gregorio said typical surge in demand during the “-ber” months and Holiday Season is expected to revert Shakey’s bottomline to the positive territory in the fourth quarter.
“Since dine-in resumed in June, we have seen a gradual increase in store traffic thanks to strict implementation of health and safety protocols within our stores and a gradual easing of mobility and capacity restrictions by the government,” he said.
“Since the pandemic has started, we’ve been busy, not only navigating the short-term effects of this crisis, but also leveraging the many assets we have,” he added.