Why Did McDonald’s India Operator Westlife Foodworld Experience a 62.5% Profit Drop in Q1?
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Synopsis
In a stunning turn of events, Westlife Foodworld, the operator of McDonald's in India, reported a staggering 62.5% decline in net profit for Q1 of FY26. Despite rising sales, increasing expenses overshadowed the company's financial performance. How will this impact the future of fast food in India?
Key Takeaways
- Net profit fell by 62.5% in Q1 FY26.
- Sales increased by 6.45% to Rs 653.25 crore.
- Expenses rose by 7.43% year-on-year.
- SSSG recorded 0.5% growth.
- Digital sales contributed 75% of overall revenue.
Mumbai, July 23 (NationPress) Westlife Foodworld, the operator of McDonald’s outlets in West and South India, has announced a significant 62.5 per cent decline in its consolidated net profit for the first quarter (Q1) of FY26, as reported on Wednesday.
The company’s profit plummeted to Rs 1.22 crore, a decrease from Rs 3.25 crore during the same period last year, according to their regulatory filing.
Despite this profit drop, sales increased by 6.45 per cent, reaching Rs 653.25 crore, compared to Rs 613.64 crore in the previous year’s quarter.
Total income, which encompasses additional earnings, rose by 7 per cent to Rs 664.44 crore, as the company highlighted in its exchange disclosure.
Nonetheless, this growth in income was mitigated by escalating expenses, which surged 7.43 per cent year-on-year to Rs 662.78 crore in the June quarter.
Westlife Foodworld noted that it achieved a Same-Store Sales Growth (SSSG) of 0.5 per cent, marking a third consecutive quarter of positive growth, attributed to stable guest counts and average transaction sizes.
Moreover, off-premise sales represented 41 per cent of total sales in the June quarter, consistent with the company's average over the past three years.
The company also revealed that digital sales contributed 75 per cent of total revenue, reflecting an increase of over 500 basis points year-on-year, largely driven by mobile app orders and self-service kiosks.
In a separate announcement, the board of Westlife Foodworld approved an interim dividend of 75 paise per share for FY26, based on the financial performance in the first quarter.
At the close of trading, shares of Westlife Foodworld were priced at Rs 772.1 on the National Stock Exchange (NSE), marking an increase of 1.57 per cent or Rs 11.95 from the previous day’s closing.
Point of View
We at NationPress aim to bring forth the realities of the business landscape. The sharp decline in Westlife Foodworld's profits, despite rising sales, underscores the challenges faced by the fast-food sector in India. It reflects broader economic pressures that could influence consumer behavior and corporate strategies moving forward.
NationPress
23/07/2025
Frequently Asked Questions
What caused Westlife Foodworld's profit drop?
The profit drop was primarily due to rising expenses which increased by 7.43% year-on-year, overshadowing sales growth.
How did sales perform in Q1?
Sales for Q1 rose by 6.45% to Rs 653.25 crore compared to the same period last year.
What percentage of sales came from digital channels?
Digital sales accounted for 75% of overall revenue during the quarter.
What is Same-Store Sales Growth (SSSG)?
SSSG is a measure of the revenue growth from existing stores, and Westlife Foodworld reported a 0.5% growth for the quarter.
What dividend was declared by Westlife Foodworld?
The board approved an interim dividend of 75 paise per share for FY26.
