McDonald's India operator's quarterly loss narrows as deals lure customers (updated)

Westlife Foodworld

Today 08:35

Adds details from the investor presentation in paragraphs 4-5, 7-8
Oct 23 (Reuters) - Westlife Foodworld WEST.NS, which operates some McDonald's MCD.N restaurants in India, posted a narrower quarterly loss on Friday, as budget-friendly meals and limited-edition collectibles attracted consumers even as expenses soared.
     Restaurants have seen costs of everything from raw materials to energy rising since the onset of the Middle East war, while competition from local rivals forced them to roll out discounts for price-sensitive customers.
McDonald's offered meals starting at 99 rupees, delivery discounts, 50% off on select combos for a few days and limited-edition Spider-Man merchandise that coincided with the release of the web-slinging superhero's latest movie.
The affordable everyday meal brought in more buyers through the door and was the primary driver for customer growth, Westlife said. 
Loss before tax and exceptional items narrowed to 26.95 million rupees ($283,900.87) for the second quarter ended September 30 from 158.5 million rupees a year earlier, the franchisee, which operates in west and south India, said.
Revenue from operations rose over 16% to 7.42 billion rupees, while same-store sales - a measure of growth at mature restaurants - expanded 10.1%.
However, the cost of materials - commodities, utilities and particularly oil and chicken - surged nearly 37% to 2.42 billion.
The company said an increase in employee costs also weighed on restaurant-level margins after the Karnataka state government raised minimum wages for workers.
Shares of the company rose as much as 3% to 547.8 rupees in afternoon trading on Friday. 
($1 = 94.9275 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai and Aishwarya Jain in Bengaluru; Editing by Harikrishnan Nair)
((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))