Westlife Foodworld (505533) Q3 24/25 earnings summary

Executive summary

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

• Store network expanded to 421 restaurants across 67 cities, with 15 new stores added in the quarter.

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

• Profitability remained steady despite inflationary pressures, with gross margin at 70.1% and Op. EBITDA margin at 14%.

• Digital sales now account for nearly 70-71% of revenue, with over 3 million monthly active users and strong loyalty program engagement.

Financial highlights

• Gross margin improved sequentially by 40 bps 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).

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

• Average sales per store (AUV) 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

• Management targets 45-50 new stores in FY25 and 580-630 restaurants by CY27, focusing on South India and smaller towns.

• Vision 2027 aims for INR 40-45 billion in sales by FY28, with a focus on value, menu innovation, and cost governance.

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

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

• Expecting gradual improvement in eating out trends despite current softness in consumption.