Jubilant Foodworks Q3 profit grows 7.4% as sales recover; announces stock split

Food service company Jubilant Foodworks Ltd, which operates the Domino’s Pizza chain in India, reported a 7.4% increase in its consolidated net profit for the third quarter ended December 2021 as sales recovered.

The company said profit for quarter rose to Rs 1,331.9 crore from Rs 1,239.1 crore during the same period last year. On a quarter-on-quarter basis, the profit was up 11.1% from Rs 1,198.2 crore. 

Revenue from operations increased 13.2% to Rs 12,107.7 crore from Rs 10,692.8 crore a year earlier.

Growth was driven by improved recovery in the dine-in channel and supported by a continued strong momentum in the delivery channel, the company said.

When compared with the pre-Covid period of Q3FY20, Domino’s system sales recovered by 112.9%. This was attributed to recovery in the Delivery and Takeaway channels by 128% and 148.2%, respectively. Dine-in channel recorded a healthy recovery at 71.7%, Jubilant said.

The company also announced a stock split in the ratio of 1:5. This means one share of face value Rs 10 will be split into five shares of face value Rs 2. This, the company said, will enhance liquidity of its shares and encourage the participation of small investors.

Jubilant shares ended 4% down on the BSE on Wednesday at Rs 3,301.25 apiece in a strong Mumbai market. The shares have fallen 28% since touching a one-year high in October, much higher than the broader market’s decline.

Other key highlights

1) Standalone gross profit up 11.9% in the third quarter on a year-on-year basis.

2) Standalone gross margins down from 78.3% in the third quarter last year to 77.6%.

3) Standalone EBITDA was up by 13.9% on a year-on-year basis with EBITDA margin at 26.6%.

4) Opened two new Dunkin Doughnuts restaurants during the third quarter and closed one.

5) Opened one new Domino’s store each in Sri Lanka and Bangladesh.

6) Opened five new Hong’s Kitchen and Ekdum! Restaurants in the third quarter.

Management commentary

Jubilant said that during the third quarter, it opened a record 75 new Domino’s stores. “This is the highest ever number of new store openings by any franchisee in any quarter in any market,” it said. 

The company said it added 17 new cities in the country to its tally and now has outlets across 322 cities. Moreover, it has also hit the milestone of 500 Domino’s stores in India, Jubilant said. 

Jubilant said it recently opened its first two Popeyes restaurants in Bengaluru, with one more scheduled to open shortly. 

Jubilant acquired a 30.75% stake in Hashtag Loyalty Private Limited, which operates an online food ordering platform - Thrive - for Rs 22.2 crore. Also, through its wholly owned subsidiary Jubilant Foodworks Netherlands BV, it increased its stake in DP Eurasia NV to 40.29%.

“We have delivered a strong, all-round Q3FY22 performance, along with a record expansion of the Domino’s store network. The company continues to create benchmarks, surpass key milestones and we remain excited with the growth opportunity that lies ahead,” Jubilant chairman Shyam Bhartia and co-chairman Hari Bhartia said.

“We are also making disciplined strategic investments that will help us drive growth, strengthen capabilities and continue creating value for all our stakeholders,” the duo said. 

Jubilant CEO Pratik Pota said the company recorded healthy revenue growth and strong profitability in the face of COVID-induced restrictions and significant inflationary headwinds while accelerating its network expansion.

“The recent launch of Popeyes and our surpassing of 1500th Domino’s stores milestone in India underscores our confidence as we stay focused on driving sustainable, profitable growth in the business,” Pota added.