McDonald's India operator Westlife misses Q2 profit view as consumers cut back (updated)

Westlife Foodworld

24/10/2024 11:13

(Adds details, background in paragraphs 2-9)
       Oct 24 (Reuters) - Westlife Foodworld  WEST.NS , the
operator of McDonald's  MCD.N  restaurants in west and south
India, reported a nearly two-fold drop in quarterly profit on
Thursday, missing estimates, on weak demand as cost-conscious
customers cut back on spending. 
    The restaurant operator's consolidated profit after tax
stood at 3.6 million rupees ($42,832.16) for the second quarter
ended Sept. 30, sharply lower than 223.7 million rupees a year
ago.
    Analysts, on average, had expected 48.9 million rupees,
according to data compiled by LSEG.
    Westlife's shares fell as much as 5% after the results.
    Quarterly same-store sales declined 6.5%, owing to subdued
in-store business, which makes up more than half of its sales.
    Global fast-food chains are struggling to attract consumers
in India, a highly price-sensitive market, where customers have
been cutting back on discretionary spending due to rising prices
of essentials, including food.
    Westlife, too, has focused more on cheaper meals and menu
items, including the launch of a 'Chicken Surprise' burger at
less than $1.
    However, overall revenue stayed nearly flat, edging up 0.5%
to 6.18 billion rupees due to the addition of several new
stores. It had reported a revenue growth of 7.4% in the
corresponding quarter a year earlier.
    Westlife kicks off earnings in the sector, which includes
Domino's operator Jubilant Foodworks  JUBI.NS , KFC franchisees
Devyani International  DEVY.NS  and Sapphire Foods  SAPI.NS ,
and Burger King operator Restaurant Brands Asia  RESR.NS .
    
($1 = 84.0490 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai and Ashna Teresa
Britto in Bengaluru; Editing by Abinaya Vijayaraghavan)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))