Max’s Group posts lower 9-month earnings on higher operating costs, reinvestments

Casual dining restaurant operator Max’s Group Inc. (MGI) on Thursday reported a decline in its net income for the third quarter of the year, dragged by higher operating costs and strategic reinvestments during the period.

In a regulatory filing, MGI said its net income dropped to P22 million from P68 million the same period last year, as systemwide sales declined to P4.544 billion from P4.618 billion, while cost of sales grew to P2.140 billion from P1.987 billion.

Blended same-store sales growth (SSSG) for the quarter stood at 1.7%, with key brands—Max’s, Pancake House, and Krispy Kreme—posting a range from 2.4% to 6.9%.

This brought the year-to-date net income to P186 million, down from P314 million in 2023, as systemwide sales fell to P13.722 billion from P13.809 billion, while cost of sales increased to P6.125 billion from P5.909 billion.

“We are pleased with the progress we’ve made in the first nine months of 2024, despite some external challenges,” MGI president and chief executive officer Robert Trota said.

“Our strategic focus on optimizing our store network, improving operational efficiencies, and investing in brand innovations will pave the way for sustained growth and consumer loyalty. We are confident that Max’s Group will continue to thrive and meet our long-term goals,” he added.

The group opened 17 new stores and renovated key locations as of September 30, 2024, ending the period with 567 locations in the Philippines, and 59 stores internationally.

In line with its optimization of retail trade areas, the company reported a net closure of 31 stores versus the 13 in the same period last year, which were executed to mitigate challenges posed by underperforming stores.

“The dip in net income and EBITDA is mainly due to one-time store closure expenses, higher consultancy and professional fees associated with process improvements and system efficiencies and increase in administrative labor costs,” MGI said.

“Despite these hurdles, the group remains committed to driving growth through operational improvements while sustaining its brand positioning and consumer relevance,” it added.

MGI’s brand portfolio also includes Max’s Corner Bakery, Maple, Max’s Kabisera, Le Coeur De France, and Singkit. — BM, GMA Integrated News