The impact of demonetisation has showed up in the form of reduced phone orders for Domino's Pizza, Sachin Sharma, CFO of Jubilant Foodworks, which operates the franchise, told CNBC-TV18 today. "These headwinds are expected to continue for another 2-3 months."
Same-store-sales growth at negative 3.3 percent was much ahead of analysts' estimates of negative 5-6 percent for the quarter, against negative 5 percent in previous quarter and growth of 2 percent in year-ago quarter.
In an interview to CNBC-TV18, Ajay Kaul, CEO of Jubilant Foodworks spoke about the results and his outlook for the company.
After Domino's Pizza and Dunkin' Donuts franchise owner analysts meet Motilal Oswal says that second quarter of FY17 will surely be positive due to launch of Burger Pizza. It says the management has assured that working with vendors will drive efficiencies in supply chain.
The company has said it has initiated process of identifying his successor but Kaul‘s exit may not go well with investor as he was perceived as architect of strong supply chain and operation excellence.
Jubilant FoodWorks today said its CEO and Whole-time Director Ajay Kaul will resign to pursue opportunities outside the company.
Despite a dismal performance in the first quarter of FY17 where its same-store sales growth went into the negative territory for the first time in past seven quarters, Jubilant FoodWorks is confident of an improved show and a positive same-store sales growth in the second quarter.
Brokerage firms like JP Morgan, Credit Suisse and Morgan Stanley are overweight on the Domino's Pizza maker hoping for a positive growth in Q2.
However, total income from operations went up by 6.69 percent to Rs 608.91 crore during the quarter under review as against Rs 570.68 crore in the year-ago period, Jubilant FoodWorks Ltd (JFL) said in a filing to the BSE.
It is easier to understand why e-wallet payments are catching on fast in India. More people own smart phones now and are becoming tech-savvy. And e-wallet providers are fighting it out among themselves to grab more of this market share.
Credit Suisse argues that Pizza Mania priced at Rs 60 competes well not only with McDonalds, but with upcoming brands such as Faasos, and also with chains such as Shiv Sagar and unorganised road side food vendors.
Jubilant Foodworks plans to open 130-140 new Domino's Pizza outlets and around 20 new Dunkin' Donuts restaurants in the current fiscal to expand its footprints in the country
Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) may grow 10.3 percent to Rs 77 crore but margin may see contraction at 12.1 percent against 12.9 percent YoY, impacted by high employment benefits and rent.
According to bulk deal data available with the stock exchanges, Jubilant Consumer, promoter of Jubilant FoodWorks, sold a total of 23,70,170 shares, amounting to 3.6 percent stake, of the company.
Both Amritesh and Bhasin would report to Jubilant FoodWorks CEO Ajay Kaul, Jubilant FoodWorks said in a statement.
The EcoEnergy business of Wipro rolled out its multi-year Managed Restaurant Energy Services (MRES) programme last year which ensures effective sustenance of energy cost reduction, Wipro said.
MobiKwik has partnered more than 10,000 retail stores, which includes merchants such as Big Bazaar, Barista, Domino's Pizza, WHSmith India, Archies and Sagar Ratna, among others.
The company had posted a consolidated net profit of Rs 35.01 crore in the same quarter last fiscal, it said in a BSE filing.
J Patrick Doyle, President and CEO, Domino's Pizza, says the country is the largest market outside US and Jubilant Foodworks and Domino have set out together from a long-term of view.
Speaking to CNBC-TV18, Ajay Kaul, CEO of Jubilant Foodworks says that the new store is expected to breakeven within two to three months of launch and costs can be recovered in two to three years.
Shares of Jubilant Foodworks were down 7 percent since Yum! Brandsreported Q3CY15 results on October 6. Goldman Sachs believes the correction was due to increased concerns on same-stores-sales growth (SSSG) after Yum! reported negative 18 percent SSSG in India.
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.
Jubilant FoodWorks, which operates Domino's Pizza and Dunkin Donuts chains in India, had reported 6.27 percent increase in its standalone net profit at Rs 31.53 crore for the first quarter ended June 30, 2015.
The brokerage feels that urban consumption is likely to pick pace in coming quarters.
Analysts polled by CNBC-TV18 expect same-store-sales-growth (SSSG)of 6-8 percent in Q1. Gross margins are likely to reflect advantage of soft commodity prices but store addition costs may partially weigh down on margins. Rent is likely to remain steady without significant hikes while higher tax burden may impact bottom line.