Westlife Foodworld (505533) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue reached INR 6.54 billion, up 9% year-over-year, with same-store sales growth (SSSG) rebounding to 3% and digital sales contributing up to 71%.

• Store network expanded to 421 restaurants across 67 cities, with a record 46 new openings in 2024 and 15 added in Q3 FY25.

• Growth was driven by increased guest counts, stable average check, and broad-based channel performance, supported by product innovation and value offerings.

• Digital transformation accelerated, with nearly 70% of revenue from digital channels, over 3 million monthly active app users, and strong loyalty program engagement.

• Profitability remained steady despite inflationary pressures, with gross margin at 70.1% and Op. EBITDA margin at 14.0%.

Financial highlights

• Gross margin improved sequentially to 70.1% despite inflation in key commodities.

• Q3 FY25 Op. EBITDA was INR 915.8 million (14.0% margin), down 4.6% YoY; Cash PAT was INR 520 million (8% margin), down 13.5% YoY.

• Restaurant operating margin at 20.6%, down from 22.5% YoY due to operating deleverage and higher A&P spend.

• Average sales per store on a trailing 12-month basis was INR 60 million.

• Extraordinary expenses of INR 31.8 million in Q3 FY25 related to asset write-offs and ESOP charges.

Outlook and guidance

• On track to achieve FY25 target of 45-50 new restaurant openings and aiming for 580-630 restaurants by CY27.

• Management targets INR 40-45 billion in sales by FY28, with a focus on transaction-driven SSSG and value-led guest count growth.

• Aiming for 18-20% Op. EBITDA margin by 2027, with profitability expected to improve as volumes rise.

• Sequential improvement in profitability expected as average unit volume rises and cost governance initiatives take effect.

• Price increases of 2%-4% annually are planned, in line with inflation.