Analyst Concall
Domino's revenue growth due to investments - Jubilant Food
This story was originally published at 21:45 IST on 12 February 2025
Register to read our real-time news.Informist, Wednesday, Feb. 12, 2025
Please click here to read all liners published on this story
--Jubilant Food: Made investments despite softer demand outlook
--CONTEXT: Jubilant Foodworks mgmt's comments in post-earnings investor call
--Jubilant Food: Number of COFFY stores in Turkey crossed 150 in Oct-Dec
--Jubilant Food: Competitive intensity continues to be high
--Jubilant Food: Like-for-like COFFY sales in Turkey declined YoY in Oct-Dec
--Jubilant Food: Overall demand scenario muted
--Jubilant Food: Domino's India dine-in sales should improve in 1-2 qtrs
--Jubilant Food: Need right capex model for Popeyes business
--Jubilant Food: Need to find right locations for Popeyes stores
--Jubilant Food: Outlook not bearish for Popeyes business
--Jubilant Food: Rent costs rising in line with new store additions
--Jubilant Food: Growth of pizza sales definitely muted across industry
--Jubilant Food: Growth in new customers largely due to lower delivery fees
By Rajesh Gajra
NEW DELHI – Jubilant Foodworks Ltd. was able to record strong like-for-like revenue growth of 13% in Domino's India revenue for the December quarter as the company continued to make investments and focus on growing the business despite a softer demand outlook in the pizza industry, the company's management said at a post-earnings call with investors and analysts.
Despite the overall muted demand scenario, the company likely gained market share due to its intense focus on growing the business through innovative products, faster deliveries, and lower delivery charges, the management said. The growth in new customers was largely due to lower delivery charges, the management said. However, the competitive intensity in the pizza industry continues to be high, they said.
In its investor presentation, the company said that growth in investments in technology, supply chain capabilities, and new brands will continue in its India business. Jubilant Foodworks run franchise operations in India, Sri Lanka, Bangladesh, Turkey, Azerbaijan, and Georgia for global restaurant brands such as Domino's, Popeyes, and Dunkin'. The company also operates two own brands, India-based Hong's Kitchen and Turkey-based COFFY.
On the decline in Domino's India dine-in channel revenue in the December quarter, the management said this may have been because some customers who were giving takeaway orders earlier may have shifted to delivery-based ordering. Domino's India dine-in channel revenue declined 2.4% on year in Oct-Dec. The dine-in sales at Domino's India should improve in the next couple of quarters, the management said.
The average order ticket size in the dine-in segment of Domino's India declined on a year-on-year basis. Excluding take-away orders too, the average order ticket size declined, according to the management, but the decline was "very marginal."
On the profitability front, the management said the company's standalone operating margin contracted by 145 basis points on year to 19.4% due to higher operating costs, including the impact of higher rental costs from the new store additions. According to the management, "the rent costs are not increasing in line with the kind of growth we are seeing." The management expects that the headwinds on this to be there going forward.
Jubilant Foodworks also operates the Popeyes franchise business in India, and currently, it has 58 outlets with most of them in the southern states of the country. The management said the company was present in Kerala, Tamil Nadu, Karnataka, and Telangana, which "are the right places to be" given the range of non-vegetarian items on the Popeyes menu. But the franchise has now come to the National Capital Region and the company was "looking to launch in Mumbai." The management said there was no bearishness in the outlook on the Popeyes business.
The company will expand the Popeyes network, the management said, but there is first a need to find the right locations for the stores and the right capex model.
The like-to-like sales in the company's COFFY operations in Turkey declined 2.6% in the December quarter, according to the management. But the company is optimistic about the prospects of the business, which saw the store count rise to 152 at the end of December quarter from 116 stores at the end of the previous quarter. The medium-term potential for number of COFFY stores is 350, the company said in its investor presentation.
On Wednesday, shares of the company ended 3.1% lower at INR 641 on the National Stock Exchange. End
Edited by Saji George Titus
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
