McDonald’s India franchisee Westlife Foodworld Q2 profit drops 29.1% to Rs 22.37 cr on higher costs, revenue up 7.4% YoY

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Westlife Foodworld Limited (WFL), formerly known as Westlife Development and the owner-operator of McDonald’s restaurants across west and south India, on Thursday announced its Q2 earnings with profit at Rs 22.37 crore. The Q2 profit dropped by 29.1 per cent on-year in comparison to Rs 31.54 crore during the corresponding quarter of last year. It posted revenue from operations at Rs 614.73 crore, up 7.4 per cent as against Rs 572.42 crore during the second of FY23. 

Westlife Foodworld’s operating EBITDA grew 7 per cent YoY in H1FY24. Despite the lower operating EBITDA margin on account of higher G&A costs, gross margins improved by 93 bps YoY in Q2, thanks to an improved mix and cost-saving initiatives, whereas input costs remained mostly in line with the company’s expectations.

Westlife Foodworld said that its on-premises as well as off-premises businesses grew by 7 per cent YoY, with the off-premise contribution remaining stable at 41 per cent. “The group continues to focus on digital transformation with self ordering kiosks and mobile apps, with digital sales growing by 30 per cent YoY and contributing 67 per cent to the top line,” it said. 

Despite ongoing market challenges, the company added, it delivered a 3 per cent Same Store Sales Growth (SSSG) in H1FY24, marking an 11 per cent YOY growth in revenue compared to H1FY23. Q2FY24 sales grew by 7 per cent YoY, demonstrating the company’s ability to sustain growth and profitability. SSSG in Q2 was 1 per cent YoY.

“Our second quarter results, amidst challenging market conditions, reflect consistently strong execution of our long-term strategic playbook aligned with our Vision 2027. The resilient Q2 FY24 performance and sales growth affirm that Westlife Foodworld’s strategy of omnichannel, menu innovations, and prudent network expansion is working. While macroeconomic challenges persist, we continue to invest in our new stores and our other growth drivers to create value for all our stakeholders,” said Amit Jatia, Chairperson, Westlife Foodworld.

In terms of its network presence, as of September 2023, Westlife Foodworld is present in 370 restaurants across 59 cities. The company added 9 restaurants during Q2FY24 and is on track to add 40-45 stores in FY24. It aims to reach 580-630 restaurants by 2027.

Westlife Foodworld has a total of 71 drive-thrus and the company added 2 during the second quarter of FY24. It has 327 McCafés and Q2 saw an addition of 11 more by the company. Westlife also has a total of 237 EOTF stores and it added 13 more in Q2FY24. “This expansion underscores Westlife Foodworld’s commitment to catering to a broad market segment across various dayparts. It also fortifies its unique business model of combining quality food offerings with innovative dining experiences, thereby establishing a strong foothold across the geographies of West and South India,” the company said in a statement.