Jubilant FoodWorks, the operator of fast-food chains such as Domino’s Pizza and Dunkin Donuts in India, has reported a drop in profits in its fourth quarter results. This is due to high inflation pressures, which have caused margins to shrink. Here is a breakdown of the Q4 results:
Profits fall
Jubilant FoodWorks’ profits have fallen by 2.6% to INR 103.7 crores ($14 million). This is in contrast to the INR 106.4 crore ($14 million) net profit that the company had made in the same quarter last year. According to the company, this decline is due to high inflationary pressures in the market.
Margins shrink
The inflationary pressures have also caused margins to shrink, with the company’s operating margin falling to 20.8% from 22.7% in the same quarter last year. The company has said that this is the result of higher raw material costs, which have put pressure on margins.
Revenue growth slows
Jubilant FoodWorks’ revenue has continued to grow, but at a slower pace than in previous years. The company’s revenue in the fourth quarter rose by 5.4% to INR 1,182.3 crores ($158 million), compared to INR 1,121 crores ($150 million) in the same quarter last year. The growth rate was slower than the 15% rise in the third quarter of the financial year.
Domino’s sees strong sales growth
Despite the challenging market conditions, Jubilant FoodWorks’ Domino’s Pizza chain has continued to perform well. The company reported strong sales growth of 6.9% for Domino’s in the fourth quarter, which is higher than the 5% growth seen in the third quarter. The company attributed this growth to strong demand and the introduction of new products.
Dunkin Donuts struggles
However, the Dunkin Donuts chain struggled in the fourth quarter, with sales declining by 4.6%. This is a sharper decline than the 2.5% drop seen in the third quarter. According to the company, this is due to weak consumer sentiment and intense competition in the market.
Expansion plans
Jubilant FoodWorks has been expanding its presence in India and abroad. The company opened 40 new stores in the fourth quarter, bringing the total number of stores to 1,392. The majority of these new stores were for Domino’s, which added 38 stores to its network. The remaining two stores were for Dunkin Donuts. The company also announced plans to open new stores in Bangladesh, Nepal, and Sri Lanka.
Outlook for the future
Jubilant FoodWorks said that it expects the high inflation pressures to continue in the near-to-medium term. The company will continue to focus on cost management and improving operational efficiency to mitigate the impact of these pressures. It also said that it remains optimistic about the long-term growth potential of the food services industry in India and abroad.
Conclusion
Jubilant FoodWorks has reported a drop in profits in its fourth quarter results due to high inflationary pressures, which have caused margins to shrink. Despite this, the company has continued to grow its revenue and has seen strong sales growth for its Domino’s Pizza chain. However, the Dunkin Donuts chain has struggled due to weak consumer sentiment and intense competition in the market. The company remains optimistic about the long-term growth potential of the food services industry and has plans to expand its presence in India and abroad.
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