United Foodbrands (BARBEQUE) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue from operations was ₹3,057 million, down 5.6% year-over-year but up 2.6% sequentially, with management optimistic for gradual recovery and SSSG improving month-on-month.

• Operating EBITDA grew 8.8% year-over-year to ₹509 million, with a margin of 16.6%, and adjusted operating EBITDA rose 18.1% to ₹212 million, margin 6.9%.

• Premium dining brands Toscano and Salt delivered high operating margins and continued growth, while international business faced temporary setbacks due to weather in Dubai.

• Four new restaurants were opened with updated designs, and the company targets 25-30 new stores in FY25 and 100+ by FY27, aiming for a network of 325 restaurants.

• The group reported a consolidated net loss after tax of ₹48.60 million for Q1 FY25, compared to a net loss of ₹40.52 million in Q4 FY24 and a net loss of ₹43.44 million in Q1 FY24.

Financial highlights

• Gross margin improved to 68.1%, up 0.4% year-over-year, with 80 bps from reclassification and the rest from better realizations and lower input costs.

• Restaurant operating margins rose by 200 bps; consolidated operating EBITDA grew 8.8% to ₹509 million, with reported operating margin up 220 bps to 16.6%.

• Adjusted operating EBITDA (post Ind AS 116) grew 18% to ₹212 million; adjusted operating margin improved 140 bps to 6.9%.

• Cash profit increased 17.4% year-over-year to ₹195 million, representing 6.4% of revenue.

• Same Store Sales Growth (SSSG) was negative at (7.4)%, impacted by prior year offer-led volume and temporary closures.

Outlook and guidance

• SSSG showed sequential improvement from April (-10%) to July (-3%), with management expecting further improvement post-festival season in Q3.

• Q2 is seasonally weaker due to festivals, but positive trends are emerging in July, especially in north and east regions.

• Targeting 25-30 new restaurants in FY25 and 100 new restaurants by FY27, with growth spread across brands and geographies.

• Eight new restaurants under construction, expected to open in Q2/Q3 FY25.

• The consolidated results for Q1 FY25 are not directly comparable to Q1 FY24 due to the acquisition of a subsidiary in Q3 FY24.