(Reuters) -Westlife Foodworld, the operator of McDonald’s restaurants in west and south India, reported a nearly two-fold drop in quarterly profit on Thursday, missing estimates, on weak demand as cost-conscious customers cut back on spending.
The restaurant operator’s consolidated profit after tax stood at 3.6 million rupees ($42,832.16) for the second quarter ended Sept. 30, sharply lower than 223.7 million rupees a year ago.
Analysts, on average, had expected 48.9 million rupees, according to data compiled by LSEG.
Westlife’s shares fell as much as 5% after the results.
Quarterly same-store sales declined 6.5%, owing to subdued in-store business, which makes up more than half of its sales.
Global fast-food chains are struggling to attract consumers in India, a highly price-sensitive market, where customers have been cutting back on discretionary spending due to rising prices of essentials, including food.
Westlife, too, has focused more on cheaper meals and menu items, including the launch of a ‘Chicken Surprise’ burger at less than $1.
However, overall revenue stayed nearly flat, edging up 0.5% to 6.18 billion rupees due to the addition of several new stores. It had reported a revenue growth of 7.4% in the corresponding quarter a year earlier.
Westlife kicks off earnings in the sector, which includes Domino’s operator Jubilant Foodworks, KFC franchisees Devyani International and Sapphire Foods, and Burger King operator Restaurant Brands Asia.
($1 = 84.0490 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Ashna Teresa Britto in Bengaluru; Editing by Abinaya Vijayaraghavan)
