Westlife Foodworld posts Q1 profit drop on higher costs, weak demand

Westlife Foodworld, the operator of McDonald's restaurants in west and south India, reported a plunge in first-quarter profit on Thursday amid frail demand and higher expenses, sending its shares down as much as 4 per cent.

Consolidated profit after tax fell 89 per cent to Rs 3.25 crore ($388,412.17) for the three months ended June 30.

India's quick-service-restaurant (QSR) brands continued to grapple with sluggish demand in the quarter despite the T20 Cricket World Cup and a school holiday period, as cash-strapped consumers cut back on dining out. The decline in Westlife's dine-in sales overshadowed higher deliveries.

Westlife's same-store sales fell 6.7 per cent during the quarter. Its expenses swelled around 7 per cent to Rs 617 crore, led by a surge in "royalty costs", the company said in a statement without giving further details.

 

Revenue from operations was little changed at Rs 616 crore.

"The quarter's results reflect the ongoing challenges in the operating environment," said Chairperson Amit Jatia.

Westlife's shares ended 2.3 per cent lower, logging its worst day in a month.