BENGALURU (Reuters) – Sapphire Foods India, which operates the Pizza Hut and KFC chains of restaurants, posted its biggest profit fall since listing and missed estimates on Friday, as inflation-weary customers continued to cut back on dining out and ordering in.
The Yum Brands franchisee’s consolidated net profit fell 98% to 23.9 million Indian rupees ($286,271.4) for the quarter ended March 31, marking its fourth straight quarterly profit fall.
Analysts, on average, had expected a profit of 44.5 million rupees, according to LSEG data.
Shares of the company, which went public in November 2021, fell as much as 3.3% after the results.
India’s quick-service restaurants struggled throughout the fiscal year to lure in customers, who cut back spending due to sticky inflation. The country’s food inflation, which accounts for nearly half of the overall consumer price basket, has remained high so far this year.
Sapphire Foods’s restaurants launched new items at lower prices, as well as valued-added meals such as Pizza Hut’s launch of a cheesy pizza-sandwich meal called Melts priced at 259 rupees and above, but customers could not be swayed.
Expenses rose 15% as raw material prices climbed 9.4%. Revenue climbed 12.7% to 6.2 billion rupees.
Rival McDonald’s India franchisee Westlife also posted a 96% slide in fourth-quarter profit on frail demand.
Devyani International, which also operates KFC outlets in the country, and Domino’s India-franchisee Jubilant FoodWorks are yet to report results.
($1 = 83.4872 Indian rupees)
(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Janane Venkatraman)
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