Domino’s Pizza’s franchisee Jubilant FoodWorks’ margins under pressure; revenues up 26% in Q1

Jubilant FoodWorks Ltd, a franchisee for international fast food brands such as Domino’s Pizza and Dunkin’ Donuts in India, saw margins come under pressure in the quarter ended June 30, 2013, with higher rentals for its stores besides an increase in depreciation provision and other expenses. While revenue growth was robust, it was driven by new store openings as same-store sales growth decelerated.

The firm reported a 5 per cent rise in net profit to Rs 34 crore for the first quarter over the year-ago period. EBITDA stood at Rs 66 crore, up 16 per cent.

Driven by growth in both the brands, revenues in the quarter stood at Rs 396.42 crore, up 26 per cent compared with Rs 314.44 crore in the corresponding quarter last year.

Ajay Kaul, CEO, Jubilant FoodWorks, said, “Our restaurant network for both Domino’s Pizza and Dunkin’ Donuts has been on a growth track with the opening of 26 and four new restaurants, respectively. We had planned for a continued arduous environment and worked in line to deliver healthy results for the quarter.”

Domino’s Pizza

Though revenues and the number of outlets grew, same-store sales growth rate decreased to 6.3 per cent in Q1 FY14 compared with 22.3 per cent in the year-ago period.

Domino’s Pizza now has presence in 128 cities spread across 602 outlets. Jubilant FoodWorks added 26 new restaurants for the pizza chain during the quarter.

The contribution of online ordering to delivery sales was at 20 per cent.

Dunkin’ Donuts

The firm opened four more outlets for Dunkin’ Donuts during the quarter, taking the total number of outlets of the chain to 14. The chain is expanding its product basket by adding burgers under the brand which would pitch it directly against McDonald’s in the fast food space.

(Edited by Joby Puthuparampil Johnson)

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