1 month ago
HomeMarket NewsEarnings NewsDevyani shares tumble after the KFC and Pizza Hut operator swings to a loss
Both KFC and Pizza Hut showed a fall in same store sales. Despite a sharp reduction in raw material and employee costs, the Indian franchisee for the US-based Yum Brands posted a loss in the latest third quarter ended December 2024.
By CNBCTV18.com February 11, 2025, 12:41:32 PM IST (Updated)
Shares of Devyani (the Indian franchisee for the US-based Yum Brands) fell nearly 4% after the pizza chain operator posted a consolidated loss of ₹49.2 lakh in the latest third quarter ended December 2024, compared to a profit of ₹9.6 crore in the same period last year. This despite a 53% growth in revenue to ₹1,294 crore in the three months.
The consolidated accounts showed a forex loss of ₹2.9 crore during the quarter compared to a forex gain of ₹3 crore in the same period a year earlier.
Shares of Devyani fell even before the earnings. The sell-off intensified after the numbers. The stock is now less than 20% away from its 52-week low of ₹142.25.
The Mumbai-based operator of quick service restaurants added 101 stores in India, nine in Thailand, and one in Nigeria. “I am delighted to say that DIL has successfully met its store expansion guidance, crossing an impressive milestone of 2,000 stores in the recent quarter, across all brands and geographies- ahead of the original target," Chairman Ravi Kant Jaipuria said in a statement sent to the stock exchange. The company clocked a total of 2,032 stores spread across four countries: India (1.658), Thailand (305), Nepal (29), and Nigeria (40).
Despite being a busy season, KFC clocked 4.4% fall in same store sales — stores that have been operational for at least a year — between October and December 2024. This was the second sequential decline in same store sales after a 7% decline in the preceding quarter.
Vaango, a chain serving South Indian food, popular at Indian airports, remains the best performing franchise for Devyani. With a quarterly revenue of ₹2.4 crore, Vaango stores that are at least a year old clocked a revenue growth of 9.6%, after a 11.5% growth in the preceding three months.
The same store sales for Pizza Hut stores fell 0.8%, a much slower decline compared to the 5.7% fall at the September 2024 and the 12.6% erosion a year earlier. The same was 5.1% for Costa Coffee between Oct and Dec 2024, compared to 8.7% in the preceding quarter and 5.9% a year earlier.
The earnings before interest, tax, depreciation, and amortisation (EBITDA) showed an overall improvement in profitablity. The EBITDA margin went up to 17.4% compared to 16.3% in September 2024 and 16.9% a year earlier.
A 33% saving in raw material cost and 36% reduction in employee expenses helped the company improve profitability at the operational level.
(Edited by : Sriram Iyer)
First Published:
Feb 11, 2025 12:05 PM
IST
