(Reuters) – Westlife Foodworld Ltd, which owns the franchise for McDonald’s Corp in west and south India, reported a smaller-than-expected jump in fourth-quarter profit on Tuesday, as high prices of everyday essentials led customers to hold back on discretionary spending.
The company said its consolidated profit after tax for the March quarter rose 31% to 200.9 million rupees ($2.46 million), missing analysts’ estimates of 263.7 million rupees, according to Refinitiv IBES data.
Most fast-food restaurants in India have witnessed a slowdown in recent months as higher prices of everything from milk to fuel have dented consumer spending on non-essentials, analysts have said.
Westlife’s off-premise business, which includes online orders and delivery, reported an uptick of 5%, while its on-premise business, comprising dine-ins and take-aways, grew 38%.
Operating margin rose 34% to 1.36 billion rupees even as costs remained elevated at 19%, with employee benefit costs jumping 47%.
Westlife opened 18 new restaurants in the quarter, in line with its expansion plans.
It aims to add 40 to 45 new outlets in the next financial year, and 580 to 630 outlets by 2027.
Sale of products rose 22.5% to 5.44 billion rupees.
Rival Jubilant Foodworks, which runs the Domino’s Pizza chain of restaurants in India, is slated to report quarterly results next week.
Shares of Westlife closed down 3.5% on Tuesday after results.
($1 = 81.7800 Indian rupees)
(Reporting by Aleef Jahan in Bengaluru and Praveen Paramasivam in Chennai; Editing by Sohini Goswami)
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