Shakey’s first-half profit drops 33% as margins tighten

Insider Spotlight

• First-half net income fell 33 percent to P232 million as margins tightened
• Sales grew despite weaker same-store demand
• SPAVI expects its 2026 reset to support a stronger 2027
  
  
  
  

Shakey’s Pizza Asia Ventures Inc. (SPAVI) saw its first-half profit fall by a third as higher costs, store expansion and softer same-store sales squeezed margins despite continued top-line growth.

Headline net income after tax fell 33 percent year on year to P232 million in the first six months of 2026. Even after excluding non-recurring costs tied to the restructuring of its Peri-Peri network, core net income declined 26 percent.

Gross margin narrowed by 1 percentage point to 20.1 percent, while operating expenses increased by 130 basis points to 13.9 percent of sales.

What’s driving it

 SPAVI said in its earnings release that expansion-related expenses and rising utility costs weighed on margins, with the impact amplified by softer same-store sales. Spending on brand-building and promotions also pushed operating expenses higher.

Same-store sales declined 1 percent in both the second quarter and first half as higher fuel prices and broader economic pressures weakened discretionary spending.

The counterpoint 

Sales continued growing, helped by the group’s expanding footprint. Systemwide sales increased 12 percent to P13.00 billion, while consolidated revenue rose 9 percent to P8.20 billion.

SPAVI opened 104 net new stores and outlets during the first half, including 35 during the second quarter, taking its global network to 3,074 units.

Core earnings before interest, taxes, depreciation and amortization (EBITDA) also edged up 1 percent, while SPAVI generated P257 million in free cash flow.

Vic Gregorio

President and CEO, SPAVI

What they’re saying 

Vic Gregorio, SPAVI president and CEO, said the group is pursuing expansion “at a measured pace and higher hurdle rates” as it exercises investment discipline.

“While expansion has near-term impacts on our bottomline, it also positions our brands for long-term value creation.”

Beyond the numbers 

SPAVI also recently received the Empowerment of Persons with Disabilities Award at the 31st Apolinario Awards for its Love ’Em Down program, which provides employment opportunities to people with Down Syndrome.

The company said the program, run in partnership with the Down Syndrome Association of the Philippines Inc., had 38 participants during the first half.

What’s next

SPAVI is restructuring weaker parts of its portfolio and looking for efficiencies as it navigates volatile demand and costs.

Gregorio said early third-quarter results were “somewhat encouraging,” with improvements across brands.

“Our 2026 reset will have near-term impacts to our bottomline; nevertheless, it will position the Group to deliver a much better 2027,” he said. — Princess Daisy C. Ominga| Ed: Corrie S. Narisma