Max's Group, Inc.MAXS

Max’s Group’s Revenues Jump 13% for First Nine Months of 2023;
Reinvests in Retail Experience

Manila – Max’s Group, Inc. (“MGI” or the “Group”), the country’s largest casual dining restaurant group, reported today revenues of P8.8 billion, a healthy 13% increase from 2022 for the first nine months of 2023. Systemwide sales (SWS) are at P13.8 billion growing 10% over the same period from last year propelled by local Same Store Sales Growth (SSSG) at 9%.

The solid performance is owed to the Group’s dedication to provide great food and great service to its growing base of customers. Max’s Restaurant and Pancake House are on track in rebounding from a challenging past three years as they capitalize on the growing market appetite for eating out. Meanwhile, Yellow Cab Pizza Co. and Krispy Kreme continue to be the Group’s stalwarts in the off-premise channels, while MGI’s international arm sustains its growing contribution with strong operations in the Group’s operations in the rest of Asia, North America, and the Middle East.

Revenue growth is further complemented by retail enhancements to ensure a more customer-centric experience. The brands’ store renovations and relocations in high foot traffic areas and its successful expansion in previously unserved provincial markets boosted sales, and serves as a testament to the increasing demand for MGI’s presence outside the metro. In addition to the Group’s formidable portfolio of brands, MGI has expanded its foothold in the Philippines’ food service industry by providing restaurant-quality ready-to-cook products to consumers through more than 2,500 locations nationwide, primarily in supermarkets and convenience stores.

The Group’s gross profit for the first nine months of 2023 totaled P2.8 billion with a 32.5% margin, a marked improvement compared to 2019 pre-pandemic levels of 26.1% due to strategic measures implemented to ensure more efficient operations. MGI’s aligned its strong top line performance towards reinvestment in the business in the form of increased store manpower and retail enhancements to ultimately improve customer experience. Such reinvestments and additional costs have contracted the margins by 1.7% versus 2022.

The resulting dip in the EBITDA and net income margins relative to 2022 indices from 18.9% to 16.2% and from 5.5% to 3.8%, respectively, signifies an increased allocation of resources towards the enhancement of restaurant services, and not a deterioration of operating efficiencies. In fact, these performance metrics surpass those of 2019 (EBITDA margin of 14.9% and net income margin of 2.2%), thereby demonstrating that improvements in capacity and productivity that were implemented during the pandemic have been sustained to offset the drop in operating revenues.

MGI realized a net income of P331 million and operating income of P954 million, before one-time accounting adjustments and one-off transactions. The year-on-year decline by 23% and 15%, respectively, is attributable to the boost in selling and marketing activities and to higher store related expenses that were instrumental in revitalizing the customer dining experience.

“Max’s Group is confident that our stable of brands will continue to be relevant to today’s consumer. Our reinvigorated efforts to provide customers with fresh experiences through product and retail innovations make us optimistic as the dine-in segment in particular gets a boost with the expected higher consumer spending in anticipation of the holiday season, the declining unemployment rate, and the overall trajectory of household consumption expenditure,” shares Robert F. Trota, President and Chief Executive Officer.

“These results underscore our steady growth rate notwithstanding the effects of challenging market conditions, and our teams are ready to channel this momentum into the Christmas season, priming us for a strong finish to cap the year,” adds Trota.

As of the third quarter, the Group’s store network covers 14 territories, with 591 Philippine branches across its brands, and 66 stores situated across various locations in North America, the Middle East, and Asia.