Westlife Foodworld Limited (WFL), the owner-operator of McDonald’s restaurants across West and South India, on Thursday reported its fiscal first quarter earnings with a profit decline of 88.7 per cent to Rs 3.25 crore in comparison to Rs 28.83 crore during the corresponding quarter of FY24. It posted revenue from operations at Rs 616.33 crore, marginally higher than Rs 614.54 crore recorded during Q1FY24. The company EBITDA stood at Rs 78.7 crore, down 24.5 per cent YoY.

For the quarter, the company reported sales of Rs 616.00 crore, a 0.3 per cent YoY increase. Same-store sales growth stood at (-)6.7 per cent YoY, impacted by subdued in-store business, though the off-premise segment saw positive same-store sales. 

Westlife Foodworld said that the restaurant operating margins and Operating EBITDA margin were lower by 388 bps YoY and 416 bps YoY respectively, owing to operating deleverage and higher royalty costs. However, the company is focused on delivering an 18-20 per cent operating EBITDA margin by December 2027. 

The off-premise business, meanwhile, grew by 6 per cent YoY, contributing 42 per cent to total sales. Digital sales grew by 8 per cent YoY, accounting for 69 per cent of the business. Gross margins stood at 70.8 per cent, improving by 62 bps sequentially and 21 bps YoY. This was driven by cost optimization and lower input costs, though the positive impact was partly offset by product mix changes, it said. 

Amit Jatia, Chairperson, Westlife Foodworld, said, “While the quarter’s results reflect the ongoing challenges in the operating environment, we remain focused on driving guest count and spearheading innovation to fuel our recovery. We are optimistic by the gradual improvement in the overall eating out trend which bolsters our confidence in our ability to deliver sustained, profitable growth going forward. Our relentless focus on innovation, digital transformation, and operational excellence will be the key strategic levers as we work to deliver long-term, sustainable growth and value creation for our stakeholders.”

In terms of new openings, Westlife Foodworld crossed 400 restaurant milestone across West and South India. The company added 6 new locations in Q1 and is targeting 45-50 new stores in FY25, with a focus on South India, smaller towns, and drive-thru formats. It aims to grow its restaurant footprint to 580-630 locations by 2027.

During the quarter, Westlife Foodworld launched a new entry-level Chicken Surprise burger and expanded its McCafé offerings by rolling out a new range of cakes and bakes. “The company is aiming for a 15-18 per cent contribution of McCafé to its business by 2027,” it said.