NEW DELHI: Hit hard by the Covid-induced restrictions, Jubilant FoodWorks Ltd (JFL), which operates fast-food chains Domino's Pizza and Dunkin' Donuts, slipped into losses.
In the first quarter of the current financial year (Q1 FY21), the company registered a consolidated net loss of Rs 74.47 crore impacted by temporary store closures and the subsequent local restrictions on operational hours. It had posted a net profit of Rs 71.48 crore in April-June quarter a year-ago.
Revenue from operations fell 59 per cent year-on-year for the quarter to ₹388.4 crore as against Rs 949.11 crore in the corresponding quarter last fiscal.
“The impact of covid 19 was felt severely in Q1 FY21. The nationwide lockdown led to a complete closure of stores initially, with Dine-In and Takeaway remaining closed for most of the quarter," the company said in a statement.
The company enacted several measures to contain the impact of operating deleverage.
"Cost-optimisation measures like reduction in store operating costs, rent renegotiation, variabilization of store manpower cost along with significant cut down of fixed and discretionary expenses helped partially mitigate the adverse impact on profitability,” it said.
This allowed JFL to reopen stores swiftly for delivery – Domino’s was amongst the fastest to reopen outlets with 78 per cent of the network resuming operations by June.
This helped JFL’s revenue from operation to recovery quickly.
“The revenue recovery improved significantly, with a recovery of 69.8 percent in July and 84.6 percent in August,” JFL said. Even as dine-in business suffered in the June quarter, the company said that the delivery and takeaway channels had recovered fully by August.
“Delivery channel grew at 110.9 per cent LFL (like-for-like) and takeaway at 161.0 per cent LFL year-on-year,” the company added.
Same store sales growth, which refers to the year-on-year growth in sales for restaurants opened before the previous financial year, for the quarter was down 61 per cent, as against a growth of 4.1 per cent in the year-ago period.
During the quarter, JFL opened 24 new restaurants of Domino’s Pizza, adding six cities in its network, and closed five stores of Domino’s Pizza in the April-June quarter, taking its total store count to 1,354.
It also closed 4 Dunkin’ Donuts restaurants, bringing the total stores to 30 at the end of the quarter from 34 at the beginning of the period.
It further plans to shutter 100 unprofitable Domino’s outlets as part of its network optimisation plan, but open an equal number of stores elsewhere.