(Reuters) -Domino’s India operator posted a quarterly profit that almost tripled from a year earlier on Thursday, as demand for its affordable pizzas and combo deals stayed strong, bucking the broader slowdown in the quick-service food industry.
Jubilant Foodworks has stood out as a rare outperformer in an environment where fast-food chains have struggled for over a year to attract consumers amid fierce competition from local rivals and only a tentative recovery in urban spending.
The Domino’s franchisee has held menu prices for most items steady for at least three years, has cut costs and driven volume through value meals, app-based delivery fee waivers and faster 20-minute delivery promise in key cities.
Jubilant logged 9.1% like-for-like sales growth in the second quarter, up from 2.8% a year earlier.
Meanwhile, Pizza Hut operators Devyani International and Sapphire Foods posted same-store sales declines of 4.1% and 8%, respectively.
Jubilant said in a press release that it expects a “promising” second half of the year.
It reported a profit of 1.86 billion rupees ($21.16 million) for the quarter ended September 30, compared to a profit a year ago of 640.5 million rupees.
Revenue from operations rose nearly 20% to 23.4 billion rupees.
While Jubilant’s efforts have powered demand, they have also capped margin expansion. Jubilant’s EBITDA margins expanded by two basis points to 15.9% for its India business.
Including businesses in other geographies, EBITDA margin contracted by four basis points.
Nonetheless, taking cues from Jubilant’s success, other fast-food franchisees have also indicated a higher focus on quick deliveries.
Devyani said in August it is strengthening its quick-delivery model, amid the success of its rival.
McDonald’s India operator Westlife Foodworld said early in November it will launch 20-minute deliveries, after reporting a drop in second-quarter same-store sales.
Jubilant added 81 new Domino’s India stores in the second quarter, taking its overall store count to 2,321 stores.
($1 = 87.8950 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Mrigank Dhaniwala)
