Jubilant Food falls 4%; sentiment negative on Yum! Q3 nos

Moneycontrol Bureau Shares of Jubilant FoodWorks fell 4 percent intraday Wednesday on a sentimental down move. Yum! Brands owner of quick service restaurants KFC, Pizza Hut and Taco Bells has posted weak third quarter earnings, missing street estimates.Investors worry that significant weakness in Yum! India’s operations may lead to lowering of expectations from Jubilant’s earnings which operates in the same QSR segment with brands like Domino's Pizza and Dunkin' Donuts.However, Jubilant Foodworks is much better placed in terms of operations as compared to Yum! Brands. Moreover, Jubilant had strong growth so far and is also profitable unlike its other peers. The company saw a growth of 6.27 percent in its net profit at Rs 31.53 crore in April-June quarter. Total income from operations in Q1 was up 19.68 percent to Rs 570.68 crore in yaer-ago period. SSG for the quarter was 4.6 percent.

Yum! Brands India division sales  fell 9 percent on an annual basis while same-store sales growth SSG for 3 brands (KFC, Pizza Hut, Taco Bell) declined by 18 percent from a fall of 4 percent year-on-year. Its operating loss in India in Q3 was up around 2.6 times at USD 8 million versus USD 3 million. Its number of stores increased 10 percent to 811 outlets in India.Its China business (contributes over 50 percent to overall business) was hurt as SSSG was at 2 percent far lower from an estimate of 9.6 percent. The company has said that it is experiencing unexpected headwinds, making the second half of the year more challenging than anticipated. In the third quarter, its bottom line rose to USD 629 million and revenue rose 2.4 percent to USD 3.43 billion. The stock fell 19 percent on Wall Street after the results and lowered its full yr profit forecast on China slowdown. At 10:57 hrs Jubilant Foodworks was quoting at Rs 1,604.00, down Rs 62.25, or 3.74 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory