Westlife Foodworld’s revenue grows 0.6% in Q2FY25, net profit declines 98.5%

The company’s operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter were down 20.7% YoY to ₹79 crore. The operating EBITDA contracted to 12.8% from 16.2% in the corresponding period last year. Meanwhile, the net profit margin shrunk further to 0.1% from 3.6% in the same period last year.

The owner-operator of McDonald’s restaurants in West and South India reported a 6.5% YoY decline in same-store sales growth (SSSG). In Q2FY25, Westlife Foodworld opened 8 new stores compared to 9 last year.

The company stated that margins were impacted due to a temporary rise in the prices of fresh produce. The restaurant operating margin (ROM) fell to 18.6% from 22.1% in the corresponding period last year. The decline in ROM was due to operating deleverage and royalty payments. The company stated that its performance will likely improve with a pickup in volume. It is aiming to deliver an operating EBITDA margin of 18-20% by FY27.

Westlife Foodworld reported that its off-premise business contributed 43% to the total sales. The total sales per store came in lower by 10% YoY at ₹60 lakh.

Amit Jatia, chairperson of Westlife Foodworld, said, the company is investing to expand its off-premise channel while upgrading its digital capabilities and menu. Despite challenges, the company’s long-term growth potential remains intact.

“Our investments in expanding our off-premise channels, driving menu innovation, and enhancing our digital capabilities are some of the key pillars of our growth strategy. We believe these efforts will help us navigate the current headwinds,” he said.

Shares of the company have declined by nearly 6% since the beginning of the year. The stock has lost over 14% in the past year.