Jubilant FoodWorks, the franchisee for Domino’s in India, saw its shares rise following the announcement of its first-quarter earnings. Here’s what you need to know:
Key Highlights
- Profit Growth: The company reported a profit of ₹56 crore for the June quarter, nearly doubling from the previous year despite challenges like high food inflation. However, this profit was below market expectations of ₹65 crore.
- Revenue Increase: Jubilant FoodWorks’ revenue rose by 45% year-on-year to ₹1,933 crore, surpassing the market’s estimate of ₹1,608 crore. This growth was supported by the introduction of value meals aimed at attracting more customers.
Impact of Food Inflation
- Rising Costs: The company faced a 34% increase in costs due to rising prices of essential ingredients like vegetables, chicken, and cheese. This was driven by overall food inflation, which stayed around 5% during the quarter.
- Consumer Behavior: High inflation led to reduced spending on eating out, which is considered discretionary. Despite this, Jubilant FoodWorks managed to maintain growth in earnings.
Operational Performance
- EBITDA Growth: Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by nearly 39% year-on-year to ₹383 crore, beating market expectations of ₹330 crore. However, EBITDA margins slightly declined to 19.8% from 20.7% a year ago.
- Initiatives: The company introduced initiatives like free home delivery and value meals priced at ₹99, coinciding with the holiday season and popular cricket tournaments like the IPL and T20 World Cup.
Like-for-Like Sales
- Positive Growth: Domino’s stores saw a 3% growth in like-for-like sales, a key metric for same-store performance, compared to a 1.3% decline in the same period last year.
Stock Performance
- As of 9:40 am, Jubilant FoodWorks shares were trading 1.29% higher at ₹606.60.
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Jubilant FoodWorks