MAX’S Group, Inc. (MGI) swung to a net loss in the first quarter as its stores closed when Luzon locked down to fight the spread of the of the coronavirus disease 2019 (COVID-19) pandemic.
The listed operator of casual dining restaurants told the exchange Wednesday it had booked a net loss of P169.28 million in the January-to-March period, a turnaround from its net income of P138.57 million in the same period last year.
Systemwide sales, which include sales from company-owned and franchised stores, fell 13% to P3.99 billion because of store closures since mid-March. Consolidated revenues likewise dropped 19% to P2.72 billion.
“The cumulative impact of temporary store closures, dine-in restrictions and various fixed costs have resulted in a swift reversal from last year’s performance. We anticipate that this trend will continue through the second quarter as well,” MGI President and Chief Executive Officer Robert F. Trota said in a statement.
The company said it had to stop operations in all mall-located stores since the imposition of the lockdown in mid-March. It kept running delivery and take-away services for stand-alone and in-line locations, until it eventually suspended all operations from March 26 to April 4.
But since then, MGI has worked on getting back on its feet and has reopened 573 stores or 76% of its total store network.
“We believe that the convergent power of our brands gives us a unique resilience as we navigate what we acknowledge will be a challenging second quarter. Our delivery business continues to operate in multiples of 2-3x versus their previous same-store levels, demonstrating the continued trust and confidence consumers put in our portfolio…,” MGI Group Chief Operating Officer Ariel P. Fermin said.
MGI is the company behind brands such as Max’s Restaurant, Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, Sizzlin’ Steak, Maple and Kabisera.
But as its finances are dampened, the company said it would suspend plans to open new stores in the meantime to help it lower overhead costs and limit capital spending.
It has also cut margin-dilutive products, improved its online services, expanded into lateral categories such as offering ready-to-cook items, and developed its team to focus on cloud-based sales.
“Our goal is to successfully execute strategic shifts to thrive within the ‘new normal’… Though challenges remain, we will continue to be vigilant and prudent in our decisions, building on the durability of our brands and in MGI’s capacity for renewal,” Mr. Fermin said.
MGI had 756 stores at the end of April, where 698 are located in the Philippines and 58 are spread across North America, Middle East and other parts of Asia.
Shares in MGI at the stock exchange shed 26 centavos or 4.13% to close at P6.04 each on Wednesday. — Denise A. Valdez