Gourmet Master Co (美食達人), the operator of cafe and bakery chain 85?C (85度C), saw its net income last year decline by more than 40 percent from 2012 on the impact of the company’s focus on structural adjustment for the whole of last year.
Net income last year totaled NT$574.03 million (US$18.91 million), or earnings per share (EPS) of NT$4.07, compared with the NT$980.14 million, or NT$6.95 per share, recorded a year ago, the company said in a statement on Wednesday.
During the October-to-December period, the company posted NT$91.62 million in net profits, or EPS of NT$0.65, down from net income of NT$166.14 million, or NT$1.18 a share, a year earlier.
“The company’s strategy in adjusting fundamentals last year raised one-time fees in the second half of last year, further passing through a temporary decline in profitability during the period,” the statement said.
Gourmet Master chief executive officer James Hsieh (謝健南), who took office in January last year, launched a series of changes at the chain and closed loss-making stores in China, opened more second-generation flagship outlets in Taiwan and focused on development in the US by opening a new central kitchen in California.
However, following a year of reconstruction, Gourmet Master expects profitability to start rebounding this year, citing stronger sales performance and net income from the US, driven by the launch of its new central kitchen, which may help raise capacity utilization and lower human-resource costs.
HSBC Securities Taiwan Ltd said Gourmet Master’s aggressive expansion in the US from last year may help sales in the region climb 284 percent this year, followed by growth of more than 100 percent next year.
In China, the pace of growth in same-store sales is improving, while new-format stores should enhance branding and boost sales growth of beverage products, HSBC said.
Yuanta Securities Investment Consulting (元大投顧) said the major uncertainty for Gourmet Master this year would be the implementation of its new franchise model in Taiwan, which may cause its operating expenses to remain high this year and lead to some downside risks for its profitability.