Westlife Foodworld (505533) Q2 24/25 earnings summary

Executive summary

• Revenue for Q2 FY25 was INR 6.18 billion (₹61,800.44 lakhs), with same-store sales down 6.5% and overall sales growth of up to 1% YoY; digital sales contributed 72-75% of total sales.

• Profit after tax for the quarter was INR 453 million (₹35.78 lakhs), a significant decline YoY, with margins pressured by higher costs and subdued demand.

• Off-premise business grew 5% YoY, while on-premise sales declined 2% YoY; guest counts remained stable in September.

• Major product launches included the McCrispy platform and Multi Millet Bun, supporting innovation and health-focused initiatives.

• Store network expanded to 408 restaurants across 66-68 cities, with 8 new stores opened and 3 closed in the quarter.

Financial highlights

• Gross margin for Q2 was 69.7%, impacted by temporary spikes in fresh produce prices.

• Operating EBITDA margin declined to 12.8% from 16.2% YoY, with Op. EBITDA at INR 791 million, down 20.7% YoY.

• Restaurant operating margin dropped by 352 basis points YoY to 18.6%.

• Earnings per share for Q2 FY25 stood at ₹0.02, down from ₹1.41 in Q2 FY24.

• Extraordinary expenses of INR 25.7 million related to asset write-offs and ESOP charges.

Outlook and guidance

• Expect gross margin to rebound to 70%+ in the second half, with business improvement supported by product innovation and value platforms.

• On track to open 45-50 new stores in FY2025, targeting 580-630 stores by CY27, with CapEx guidance of INR 220-250 crore.

• Maintain Vision 2027 targets for store count, average unit volume, and EBITDA margin of 18-20%.

• Board and Audit Committee reviewed and approved results, with no material misstatements identified.