CHENNAI (Reuters) – Jubilant Foodworks Ltd on Wednesday reported a near-71% slump in quarterly profit as the Domino’s Pizza’s Indian franchisee incurred higher expenses while inflation-hit consumers cut back on discretionary spending.
Consolidated profit fell to 285.4 million rupees ($3.49 million) for the quarter ended March 31 from 967.6 million rupees a year ago. Total expenses climbed nearly 16% to 12.05 billion rupees, Jubilant said in an exchange filing.
Gross margin shrank 164 basis points to 75.3% during the fourth quarter, Jubilant said in an earnings presentation, adding “historic high inflation continues to weigh on margins.”
Restaurants in India have been grappling with higher cost of food items like milk and cheese, raising their expenses in recent quarters. Jubilant has also been expanding aggressively to new cities, opening 250 new stores for Domino’s during fiscal 2023.
Jubilant’s revenue rose 8% to 12.7 billion rupees in the quarter, although like-for-like sales dropped 0.6% reduced spending on fast food.
Rival restaurant operators like Yum Brands franchisees Devyani International and Sapphire Foods India Ltd, and McDonald’s operator Westlife FoodWorld Ltd also reported downbeat earnings this month hit by higher expenses and dwindling demand.
Shares in Jubilant, which recommended a dividend of 1.2 rupees per share, were marginally higher on Wednesday. They are down about 8% for year so far.
($1 = 81.7800 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai; editing by Eileen Soreng)
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