INDIA- Domino’s Pizza’s India franchisee, Jubilant FoodWorks, has reported a consolidated net profit of INR 558 million (US$6.65 million) in Q2 2024, a significant increase compared to the INR 289.2 million (US$3.44 million) reported in Q2 2023.

The near two-fold increase in consolidated net profit is attributed to value meals that have successfully attracted budget-weary customers.

The unprecedented performance comes in the wake of high inflation that has significantly increased cost pressure on QSR players, which have caused an increase in prices. High inflation has also significantly reduced disposable income among customers.

These factors have significantly stifled demand in the QSR sector.

The operator’s costs increased by 34%, as prices of key ingredients like cheese, chicken, vegetables and inputs like energy increased.

Jubilant FoodWorks’ responded to this reduction in demand and cost pressure by offering free home delivery and value deals. Domino’s India offered meals from as low as INR 99 (US$1.18) in the reported quarter that coincided with summer vacations and the Cricket World Cup.

These value deals paid off, as same-store sales at its Domino’s outlets increased by 3% in Q2 2024 compared to the 1.3% decline in same-store sales reported in Q2 2023.

Jubilant FoodWorks’ operational revenue also increased by 45% in the reported quarter to INR 19.33 billion (US$230.22 million).

However, this strategy placed a dent on margins. The operator’s EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 19.3% in Q2 2024, compared to 21.1% recorded in the same quarter last year.

The market reacted positively to the results. Jubilant FoodWorks’ shares closed 0.3% higher the day the report was released.

The operator is viewed as an outlier, showing remarkable performance at a time when other QSR operators and local QSR brands have reported mixed-to-dismal Q2 2024 performance.

Restaurant Brands Asia, Burger King India’s operator, reported a narrower loss for Q2 2024 as discounts helped sway customers.

Sapphire Foods, which operates KFC and Pizza Hut chains in India, recorded a 68% decline in Q2 2024 net profits. Westlife Foodworld reported an 88.7% decline in net profits for the same quarter.

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