Max's Group, Inc.MAXS

Max's Group kicks off the year with an 86% jump in Q1 organic net income versus 2022

Max’s Group, Inc. (“MGI” or the “Group”), the largest casual dining restaurant group in the Philippines posts net income of P77 million for the first quarter of 2023, an 86% growth as compared to previous years’ P42 million.

The Group was able to maximize the return of dine-in with local same-stores sales growth (“SSSG”) at 25%, while global SSSG is at 20%, indicative of improvement in consumer spend as restrictions have been more relaxed versus the same period last year.

The Group's first quarter system-wide sales (“SWS”) across both company-owned and franchised stores totaled P4.4 billion, indexed at 96% of pre-pandemic 2019 and a growth of 24% at P3.6 billion in the same period last year from improving consumer confidence and mobility. Consolidated revenues amounted to P2.9 billion, a 32% increase from P2.2 billion last year.

“We are committed to emerge from the pandemic stronger with our tested and proven business model,” noted the Group's Chief Executive Officer Robert F. Trota. “Despite the global issue of rising commodity prices, we have consistently executed our strategies to demonstrate a business model that continues to deliver.”

The Group's core brands continued to lead MGI’s strong Q1 results. Dine-in powerhouses Max's Restaurant and Pancake House drove the rebound from a soft first quarter last year. Meanwhile, Yellow Cab Pizza Co. and Krispy Kreme maximized their off-premise fame with their strong take-out and delivery channels.

The Group has also been providing restaurant-quality food in the business to business (“B2B”) space, having expanded its retail footprint to over 2,500 quality doors spanning supermarkets and convenience stores nationwide. This feat is in line with MGI’s initiative to participate in a growing food retail category that would supplement its core restaurant and commissary businesses.

“The stellar results for the first quarter reflect the decisions made since 2020 to pivot the Group’s business model to one that adapts to a changing environment,” stated the Group’s President Ariel P. Fermin. “We still see potential for MGI to thrive even with the challenges ahead. Beyond serving our avid customer base across our portfolio of brands, we have established a formidable presence in the B2B space and provided food manufacturing services for third parties. These efforts respond to the needs of an industry that rewards innovation and novelty, and form our desire to reshape the future with good food and excellent service.”

The Group strategically adopted measures to mitigate looming economic headwinds experienced during the first quarter as evidenced in a stable gross profit margin of 31% for the quarter with over 400 basis points improvement from 26.9% in 2019 and only 48 basis points shy of the 31.5% margin posted in 2022. In absolute amounts, first quarter gross profit is at P884 million, higher by 30% from the same period last year and at par with 2019 levels.

MGI’s earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and net income margins have also been stable even with the rising costs amid headwinds. EBITDA and net income margins for the first quarter were recorded at 13.4% and 2.7%, at par with organic 2019 figures of 13.8% and 2.2%, respectively.

The Group's net income before tax (“NIBT”) for the first three months of the year is P103 million, which is almost double to the previous year's NIBT of P55 million.

“With 32% higher revenues, we were able to bring in 86% higher organic net income versus 2022,” stated the Group's Chief Finance Officer Maria Rochelle S. Diaz. “We continue to operate a solid business with plans in place to cushion the impact from external headwinds for the rest of the year. The consistent performance shown quarter on quarter also proves that our business fundamentals are resilient to withstand the pandemic and beyond.”

As of 31 March 2023, the Group’s store network covers 14 territories, with 610 Philippine sites and 65 stores situated across various locations in North America, the Middle East, and Asia.