Westlife Foodworld (505533) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was INR 6.18 billion (₹61,800.44 lakhs), up 0.6–1% YoY, with SSSG at -6.5% due to subdued demand and external factors.

• Guest counts in September matched last year's levels, indicating stabilization and early signs of recovery.

• Network expanded to 408 stores across 66–68 cities, with 8 new stores added and 3 closed during the quarter.

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

• The group operates McDonald's restaurants in West and South India through its wholly owned subsidiary, focusing on a single business and geographic segment.

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.

• Profit after tax was INR 453 million (7.3% of sales), but consolidated PAT dropped to ₹35.78 lakhs from ₹2,237.21 lakhs YoY.

• Off-premise business grew 5% YoY, with digital sales accounting for 72–75% of total sales.

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

Outlook and guidance

• Gross margin expected to rebound above 70% in the second half as input cost pressures ease.

• Store addition guidance for FY2025 maintained at 45-50 new stores, with CapEx guidance of INR 220-250 crore.

• Targeting 580-630 stores by CY27 and aiming for 18-20% Op. EBITDA margin by 2027.

• The Board and Audit Committee have reviewed and approved the results, with no material misstatements identified by the auditors.