Jubilant FoodWorks Q3 profit down 32%
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New Delhi: Jubilant FoodWorks Ltd, which operates Domino’s Pizza and Dunkin’ Donuts outlets in India, on Monday reported a 32% drop in fiscal third-quarter profit because of a decline in store-level sales and higher raw material and rental costs.
Net profit fell to Rs19.97 crore in the quarter ended 31 December from Rs29.34 crore a year ago. Sales, however, rose 3.9% to Rs658.75 crore from Rs633.76 crore a year ago.
Jubilant FoodWorks reported a 3.3% decline in same-store sales (for Domino’s) during the quarter after consumption was hit by demonetisation. Same-store sales, or sales from stores that have been open for at least a year, are a key parameter that indicates the health of fast-food companies. The company reported a growth in same-store sales in the previous quarter.
“The third quarter was a challenging quarter for the consumer sector on account of currency demonetisation. However, we were able to minimize the impact by offering multiple non-cash payment options to customers and launch new products which got excellent customer response. We also maintained a healthy pace of expansion in order to reach out to more customers,” Shyam S. Bhartia, chairman and Hari S. Bhartia, co-chairman, Jubilant FoodWorks, said in a joint statement.
During the quarter, the company’s total expenditure increased 6% due to higher rental cost as it added new stores; it also saw a rise in employee expenses due to an annual salary hike, the statement added.
Jubilant added 32 Domino’s stores and closed six during the quarter, taking the total store count to 1,107. It also added one Dunkin’ Donuts outlet and closed one. It operates 73 Dunkin’ outlets.
“Q3 FY17 mirrored the challenges faced by economy related to liquidity crunch. However, being part of the organized space along with our continued thrust on digitization, gave us the requisite agility to accept online payments and thereby contain the impact as the sector migrated to more and more cashless payment modes,” said Ajay Kaul, CEO and whole-time director.
During the December quarter, 56% of Jubilant’s online orders came from mobile apps, up from 38% in the previous quarter, the company said in the statement.
On 13 January, Jubilant FoodWorks named Pratik Pota as chief executive; he is to join the company by the end of February.
Jubilant shares rose 9.61% to Rs1,007.02 on BSE on Monday while the benchmark Sensex closed 0.7% higher at 28,439.28 points.
The promoters of HT Media Ltd, which publishes Mint, and Jubilant FoodWorks are closely related. There are, however, no promoter cross-holdings.