McDonald's India franchisee Westlife misses profit view as inflation bites

Westlife Foodworld

09/05/2023 12:01

May 9 (Reuters) - Westlife Foodworld Ltd  WEST.NS ,
which owns the franchise for McDonald's Corp  MCD.N  in west and
south India, reported a smaller-than-expected jump in
fourth-quarter profit on Tuesday, as high prices of everyday
essentials led customers to hold back on discretionary spending.
  
    The company said its consolidated profit after tax for the
March quarter rose 31% to 200.9 million rupees ($2.46 million),
missing analysts' estimates of 263.7 million rupees, according
to Refinitiv IBES data.
        Most fast-food restaurants in India have witnessed a
slowdown in recent months as higher prices of everything from
milk to fuel have dented consumer spending on non-essentials,
analysts have said.
    Westlife's off-premise business, which includes online
orders and delivery, reported an uptick of 5%, while its
on-premise business, comprising dine-ins and take-aways, grew
38%.    
    Operating margin rose 34% to 1.36 billion rupees even as
costs remained elevated at 19%, with employee benefit costs
jumping 47%.
    Westlife opened 18 new restaurants in the quarter, in line
with its expansion plans. 
    It aims to add 40 to 45 new outlets in the next financial
year, and 580 to 630 outlets by 2027.
    Sale of products rose 22.5% to 5.44 billion rupees.
        Rival Jubilant Foodworks  JUBI.NS , which runs the
Domino's Pizza  DPZ.N  chain of restaurants in India, is slated
to report quarterly results next week.
    Shares of Westlife closed down 3.5% on Tuesday after
results.

($1 = 81.7800 Indian rupees)

 (Reporting by Aleef Jahan in Bengaluru and Praveen Paramasivam
in Chennai; Editing by Sohini Goswami)
 ((aleefjahan.cs@thomsonreuters.com; 8075473630))