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Business Recorder
23-07-2025
- Business
- Business Recorder
McDonald's India operator falls significantly short of profit estimates as competition, costs bite
Westlife Foodworld, a McDonald's franchisee in India, missed quarterly profit estimates by a wide margin on Wednesday, as restaurant chains faced higher costs and stiff competition from local cafes and online kitchens. Global fast-food giants, which once drove India's burger and pizza boom, have struggled to boost sales over the past two years due to weak wage growth limiting urban spending and nimble local competitors gaining ground. Westlife posted a 62% plunge in profit after tax to 12.3 million rupees ($142,303) for the first quarter ended June 30, missing estimates of 50.8 million rupees, according to data compiled by LSEG. Rising ingredient and labour costs also weighed, as Westlife's expenses climbed 7% during the quarter. McDonald's promoted K-pop-inspired burgers starting at 69 rupees (80 U.S. cents) to lure diners, helping Westlife post a 0.5% rise in same-store sales, although this was the slowest growth in the past three quarters. However, Westlife expects better quarters ahead as the franchisee is 'observing positive signals in the market'. 'Westlife anticipates a gradual improvement in dining-out trends as inflation moderates,' Chairperson Amit Jatia said in a statement. With retail inflation in India cooling to a six-year low in June and expected to ease further in July, corporate India hopes consumer sentiment will improve. However, many analysts have warned that the sharp disinflation may also be a sign of weakening demand. Earlier in the day, Sapphire Foods India, a KFC and Pizza Hut franchisee, reported a swing to a loss.
News18
23-07-2025
- Business
- News18
Westlife Foodworld Q1 net profit down 63 pc to Rs 1.22 cr, sales at Rs 653 cr
New Delhi, Jul 23 (PTI) Westlife Foodworld, operator of McDonald's restaurants in West and South India, on Wednesday reported a decline of 62.5 per cent in its consolidated net profit to Rs 1.22 crore in the June quarter. The company had posted a consolidated net profit of Rs 3.25 crore in the April-June quarter a year ago, according to a regulatory filing from Westlife Foodworld. However, its sale rose 6.45 per cent to Rs 653.25 crore in the June quarter of FY26. In the year-ago period, the same stood at Rs 613.64 crore. 'The company delivered Same-Store Sales Growth (SSSG) of 0.5 per cent, marking the third consecutive quarter of positive momentum, driven by stable guest counts and average check," Westlife Foodworld said in its earnings statement. Total expenses of Westlife Foodworld in the June quarter climbed 7.43 per cent to Rs 662.78 crore. In the June quarter, on-premise sales grew by 8 per cent Year-on-Year (YoY), contributing 59 per cent to total sales, while Off-Premise sales increased by 4 per cent YoY. 'Off-Premise business salience at 41 per cent remains in line with last 3-year average, reinforcing the strength and relevance of the company's robust omni-channel presence," it said, adding that 'digital sales contribution reached 75 per cent, growing by over 500 bps YoY driven by mobile apps and self-ordering kiosks." The company's total income, which includes other incomes, increased 7 per cent to Rs 664.44 crore in the June quarter In the June quarter, Westlife Foodworld added nine new restaurants, expanding its footprint to 444 restaurants across 71 cities. It also achieved a milestone of crossing the 100 Drive-Thrus mark. 'It currently operates 106 Drive-Thrus, which constitute approximately 24 per cent of total restaurants," it said. In a separate filing, Westlife Foodworld informed that its board in a meeting held on Wednesday approved an interim dividend of 75 paise per equity share of face value of Rs 2 each for FY26. This is on the basis of the financial performance by the company in the June quarter. On the outlook, Chairperson Amit Jatia said: 'As India's consumption story continues to evolve, we see significant opportunity in both existing and emerging markets." 'Our Vision 2027 framework is designed to capitalise on these structural growth drivers. We believe that our three key strategic priorities of daypart leadership, omnichannel integration, and network expansion will not only enhance shareholder value but also redefine the QSR experience for consumers," Jatia added. Shares of Westlife Foodworld Ltd on Wednesday settled at Rs 776.50 apiece on the BSE, up 2.11 per cent from the previous close. PTI KRH KRH SHW view comments First Published: July 23, 2025, 17:00 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Business Mayor
28-04-2025
- Business
- Business Mayor
After Sunil Mittal, Mukesh Ambani's Reliance aims for Haier India stake
ET was first to report on December 25 that Mittal had formed a consortium with Warburg Pincus. In this battle of billionaires, the other groupings include TPG and the Burman family of Dabur; Goldman Sachs and the Amit Jatia family; and GIC of Singapore with BK Goenka of Welspun, after initially joining forces with Uday Kotak ( yes GIC) The combine of the family office of Puneet Dalmia of the Dalmia Bharat Group and Bain Capital have opted out. Chinese companies are now more amenable to conditions requiring stake dilution in favour of Indian entities if they want to expand in the country following Donald Trump's tariff blitz. With that threatening to price their products out of the US market, Chinese companies are eager to gain ground in India. Reliance entered the race after non-binding offers were made in the beginning of the year. Its advisors have directly approached Haier's headquarters in Qingdao, according to people in the know. Mittal too had gone to China a few weeks ago to meet the Haier top management, two industry executives said. Read More UK may need new gas-fired power stations to decarbonise grid It's understood that the Reliance retail unit will be the vehicle for the potential acquisition, said the people cited. Reliance is keen on going solo, unlike the others, as of now, they said. It's been building its own-brand business in electronics with licensed labels such as BPL and Kelvinator. Reconnect and Wyzr, brands that Reliance founded, have met with limited success. With most Indian companies and private equity firms making clear they are unlikely to remain junior partners in any alliance, the Chinese company is exploring the dilution of 45-48% equity to a local partner with another 3-6% set aside for Indian employees and local distributors, while retaining the rest. The final structure is expected to evolve in the next few weeks, added the people cited above. 'Reliance was nowhere in the initial list of suitors who had placed a non-binding bid for the Haier India stake,' one of them said. 'They entered the race recently and have directly reached Haier headquarters. They are very keen since they want a larger play in their own brand space in electronics like they are doing in FMCG with Campa Cola.' Reliance and Haier didn't respond to queries. Third & Growing Haier, which sells refrigerators, washing machines, televisions and air-conditioners in India, posted sales of Rs 8,900 crore in calendar 2024, up 33% from 2023, when it started local operations. It's targeting Rs 11,500 crore sales in calendar 2025. Haier has been keen to strike an equity alliance with a prominent Indian business group so that it can receive prompt approvals for its ambitious plans to expand the business in the country. Apart from the South Korean companies, it competes with Whirlpool, Havells-owned Lloyd, Godrej Appliances and Voltas Beko in India. Since tensions rose between the two countries, India has been going slow on most investments from China under Press Note 3 norms, which mandate government clearance instead of automatic approval for countries that share a border with the country. The move has hit several Chinese investments, even though some joint venture proposals, mainly in components, have been cleared in recent months. Haier India had applied for Rs 1,000 crore foreign direct investment (FDI) in 2023 but hasn't yet received approval. Its plans include expansion of plants in Greater Noida and Pune, and setting up a third greenfield facility in the south, for which it's seeking land in Andhra Pradesh and Tamil Nadu. Capacities will be saturated at the Pune and Greater Noida plants in another two to three years, going by the current pace of growth. Industry watchers say the Haier transaction got delayed by a few weeks due to the US-China tariff war as well as mixed signals. Prime minister Narendra Modi has been talking about improving bilateral relationship but in a recent interaction commerce minister Piyush Goyal said India does not intend to encourage foreign direct investment (FDI) from China. On the other hand, government officials have recently indicated to industry that joint venture proposals with Chinese minority ownership will be cleared as long as such partnerships involve transfer of critical technology that will help India build its component ecosystem. The recent volatility in global equities has dampened several high-profile listing plans, including the Indian IPO of market leader LG Electronics. Reliance is said to have raised this point to negotiate discounted valuations. The LG Electronics IPO outcome is being studied closely by the Chinese company, said executives in the know. Merger markets was the first to report that Reliance had submitted an initial bid. 'There has been a change in Reliance's thinking about their China engagement,' said a veteran group watcher. 'There has been a realisation that without China its new energy business will find it difficult to scale up. The group has also tied up with Shien for fast fashion, a move that was unthinkable some years back.' Reliance Retail chief financial officer Dinesh Taluja told analysts on Friday that its own-brand business in electronics was up 30% on a year-on-year basis in FY25. The company sells these brands not only in its Reliance Digital stores but also through distribution channels. Taluja said the merchant base selling its own brands was up 60% in FY25 from the year before.
