Jubilant FoodWorks’ Q2 Net Profit More Than Doubles
Jubilant FoodWorks Ltd.’s quarterly profit more than doubled beating estimates, driven by same-store sales growth of Domino’s Pizza chain.
Net profit for the quarter ended September rose to Rs 48.5 crore from Rs 22 crore in the year-ago period, according to an exchange filing. The consensus estimate of analysts tracked by Bloomberg had pegged the bottom line at Rs 26.5 crore. Revenue increased 9.2 percent to Rs 726.6 crore on a yearly basis.
“A combination of mid-single digit same-store sales growth and disciplined cost management led to another solid performance in Q2FY18. We made good progress towards our goals during the quarter in both Domino’s Pizza and Dunkin’ Donuts,” the company said in a separate media statement.
Domino’s Pizza’s same-store sales rose 5.5 percent, after a 6.5 percent growth in April-June. It started offering more cheese and toppings and a softer crust at no added costs, partly due to a lower Goods and Services Tax, Chief Executive Officer Pratik Pota had told BloombergQuint in August. Total levies on quick service restaurants like Domino’s came down to 18 percent from over 20 percent after the rollout of the new indirect tax regime on July 1.
The company continued to cut losses at Dunkin Donuts, the statement said. Jubilant FoodWorks had told analysts during the quarter that it targets to reduce the losses at the franchise by half in the ongoing financial year and turn them profitable over the next two years.
It closed five pizza and nine Dunkin’ Donuts outlets during the quarter. That compares with 13 new Domino’s outlets and one Dunkin’ Donuts store in the previous three months.
Cost cuts, initiated at the start of the year, aided operating performance as earnings before interest, tax, depreciation and amortisation jumped 59 percent to Rs 102 crore over a year ago. Margin expanded to 14.1 percent from 9.6 percent.
Shares of Jubilant FoodWorks rose as much as 6 percent, the most in over two weeks, to Rs 1,713.06 apiece on the BSE after the earnings announcement.