 "Domino’s")
Owner of the Domino's pizza chain, Jubiland FoodWorks’ (JFL) said its net earnings plunged 9.3% during October-December 2015 due to higher employee costs and depreciation. The firm posted Rs 31.7 crore net profit compared to Rs 35 crore in same period last year.
During the quarter, JFL’s net sales stood at Rs 633.8 crore compared to Rs 554.3 crore – 14% higher on a year on year basis. The company benefitted due to two sets of price hikes during the period – 3% and 3.8% in November and September, respectively.
JFL has recently opened 40 new restaurants and increased its footprint in nine new cities during the period, bringing Dominos’ store count up to 1,000 and city presence to 225. The company’s same store sales grew by 2% compared to a growth of 1.9% during last year.
However, according to experts, regular offers like buy one get one (BOGO) free may hamper its financials and lead to change consumer buying pattern. “Increase of promotions of the BOGO offer to 3-4 times in a month can be detrimental to the consumer buying patterns. It may lead to many consumers buying only on Friday when there is an offer," Abneesh Roy from Edelweiss Securities commented.
“JFL will be a beneficiary of any uptick in SSG in the QSR space due to its rapid expansion and strong execution. Though intense competition from online ordering apps remains a key concern," he added. JFL’s online ordering stands at 36% of its total delivery sales compared to 27% a year ago.
Commenting on the performance for Q3FY16, Shyam S Bhartia, Chairman and Hari S Bhartia, Co-Chairman, JFL said: “Our growth also continues to be cemented from the positive trajectory we are witnessing in online ordering. We will continue to make the appropriate investments to expand our technology capabilities and identify ways to extend our business on multiple channels.”
