Jubilant FoodWorks added 29 stores last quarter – 20 new outlets for Domino’s Pizza, and three stores each for its other brands Dunkin Donuts, Ekdum! And Hong’s Kitchen.
Beating analyst expectations, Jubilant FoodWorks, the operator of quick-service restaurants (QSR), reported a net profit of Rs 63 crore for the first quarter ended June (Q1FY22), as compared to a net loss of Rs 74 crore reported during the corresponding period in FY21.
The company’s performance came in the face of a second wave of the COVID-19 pandemic, which impacted its store openings across the country. Analysts had projected the company would report a profit of Rs 48.6 crore during the quarter.
Jubilant FoodWorks’ revenue from operations in the Q1 FY22, stood at Rs 879 crore, a growth of over 131 percent over the same period last year. In the corresponding quarter of the previous fiscal, the company had reported Rs 388 crore revenue from operations.
The company said the growth was driven by like-for-like sales growth (at 120 percent) and same-store growth of 114 percent in Domino’s Pizza.
The company also said that the growth in deliveries witnessed during the second wave of the pandemic helped it offset the decline in dine-in. Jubilant FoodWorks delivery channel during the quarter grew by 124 percent.
Its EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the quarter stood at Rs 211.5 crore and its EBITDA margin was 24 percent.
Recovery on track
Jubilant FoodWorks reported an almost 94 percent recovery in the first quarter of the financial year 2022 when compared to the pre-pandemic period of Q1FY20. The company had reported a net profit of Rs 71.48 crore in Q1FY20 and its revenue from operations during the period stood at Rs 949 crore, according to the BSE filing.
“As the COVID caseloads increased, we were faced with multiple restrictions. Dining operations were largely shut across the country. Mobility restrictions severely impacted our takeaway channel. State-specific delivery restrictions increased the on-ground challenges further,” said Shyam S. Bhartia, Chairman, Jubilant FoodWorks, during a post-earnings call.
However, he added, despite the reduction in operating hours and operational stores on dining, our sales recovery in Domino’s was led by strong growth in our delivery channel.
According to Bhartia, the easing of restrictions going ahead will result in sequential improvement in the company’s operating performance.
Analysts had predicted a 70-90 percent recovery for QSRs in the first quarter of the financial year 2022. Emkay Global had projected a 97 percent recovery for Jubilant Foodworks, while Edelweiss had pegged a 90 percent recovery for the company.
The segment’s quick adoption of e-commerce and delivery-led models made them less susceptible to the second wave even as stores were shut due to the lockdowns, said analysts.
Bhartia said the pandemic has accelerated the push towards digitisation and the early movers, which continue to invest in their digital capabilities will benefit in the long-term.
Expansion to resume
Jubilant FoodWorks added 29 stores last quarter – 20 new outlets for Domino’s Pizza, and three stores each for its other brands Dunkin Donuts, Ekdum! And Hong’s Kitchen. It opened stores in five new cities during the quarter.
“The lockdowns and the restrictions due to the pandemic presented a lot of on-ground challenges and they interrupted our store expansion momentum, leading to a lower number of new stores,” informed Bhartia.
The company now plans to accelerate its store expansion and plans to open about 150-175 stores in the financial year FY22. The majority of these would be Domino’s Pizza.
“Domino’s Pizza will continue to power ahead and we see a clear potential of 3000 stores in India in the medium to long term for the brand,” said Pratik Pota, CEO and whole-time director, Jubilant FoodWorks, during the investor call.
According to the company, it will open a mix of formats during the year, some of which would be shared stores between its three brands – Dunkin Donuts, Ekdum! And Hong’s Kitchen – focused on deliveries, while others would be standalone stores for all its brands, including Domino’s Pizza.