Westlife Foodworld Limited (WFL), the company responsible for operating McDonald’s restaurants in the regions of West and South India, has recently disclosed its financial performance for the quarter ending on June 30, 2023.
During this quarter, Westlife experienced a remarkable surge in sales, amounting to INR 6.14 billion, which reflects a notable 14 percent year-on-year (YoY) increase. This growth was largely driven by a significant 7 percent YoY increase in Same Store Sales Growth (SSSG). Additionally, the company’s Cash PAT (Profit After Tax) also witnessed a substantial rise, reaching INR 670 million, reflecting a strong 22 percent YoY increase.
The on-premise business segment demonstrated impressive performance, exhibiting an 18 percent YoY growth. Meanwhile, the off-premise business segment expanded by 9 percent YoY, even on a high base from the previous period.
One remarkable highlight was the soaring digital sales, constituting a significant 64 percent of the total sales. This achievement was attributed to the successful integration of Self-Ordering Kiosks and McDonald’s Apps, which offered customers a seamless and convenient digital ordering experience. The incorporation of these digital solutions played a crucial role in driving customer engagement and boosting sales during the quarter.
Westlife’s Restaurant Operating Margin achieved a robust YoY growth of 21 percent, amounting to INR 1,412 million, with the ROM (Return on Margin) reaching 23 percent, a notable increase from 21.6 percent recorded in Q1 FY23. Despite facing inflationary pressures, the company’s Operating EBIDTA (Earnings Before Interest, Taxes, Depreciation, and Amortization) showed a positive trend, rising to INR 1,053 million, reflecting a 14 percent YoY growth. Moreover, the average sales per store (TTM – trailing twelve months) also demonstrated an impressive climb, reaching INR. 66.9 million, a substantial increase from INR 57.4 million recorded in Q1 FY23.
The company’s board approved an interim dividend of INR 3.45 per share, amounting to approximately INR 538 mn, which is around 173 percent of its face value.
Amit Jatia, Chairperson of Westlife Foodworld Limited, said, “We are pleased with our first-quarter performance, which reflects the resilience of our business model and the strength of the McDonald’s brand in West & South India. Despite the challenging market conditions, we have been able to drive growth by focusing on core menu innovation, digital transformation, and enhancing customer convenience. Our commitment to serving good quality food and constantly improving the customer experience continues to be the cornerstone of our success. The first-quarter results reinforce our commitment to further strengthen our position as a leader in the QSR industry.”
As of June 2023, Westlife boasts a network of 361 restaurants spanning across 58 cities, and they have further expanded with the successful opening of four new stores in the first quarter. Looking ahead, the company has ambitious plans for growth, as they intend to introduce 40-45 additional stores in the fiscal year 2024. Moreover, they have set their sights on a remarkable goal, striving to achieve a total of 580-630 stores by the year 2027.
In the current quarter, Westlife made significant moves to enhance its offerings and consolidate its position in the burger segment. A notable addition to their menu is the Piri-Piri McSpicy range, which further expanded the McSpicy platform and brought exciting new flavors to their customers. Furthermore, the brand joined forces with Jr. NTR to introduce the delectable McSpicy Chicken Sharers exclusively in the South Market, tapping into regional preferences and preferences.
In a display of their commitment to inclusivity and diverse customer preferences, Westlife also unveiled its Jain-Friendly menu. As part of their Eatqual initiative, this menu caters to customers who prefer dishes without onions, garlic, and roots, ensuring that everyone can enjoy their McDonald’s experience to the fullest. These strategic moves demonstrate Westlife’s dedication to innovation, variety, and customer satisfaction.
Westlife remains steadfast in its dedication to store modernization, bolstering digital capabilities, and fostering menu innovation, with a particular emphasis on burger meals, chicken offerings, and the McCafe categories, all designed to cater to the diverse tastes of their valued consumers. The company’s exceptional performance in the first quarter of fiscal year 2024 serves as a resounding affirmation of its unwavering commitment to excellence and customer-centric strategies, further cementing its position as a prominent leader in the Indian retail Quick Service Restaurant (QSR) industry.