Westlife sees sharp profit decline amid weak consumer demand

Westlife Q4 earnings: Westlife Foodworld, the franchise operator of McDonald's restaurants in western and southern India, reported 96 per cent decline in fourth-quarter profit, signalling subdued consumer demand amid economic challenges.

Consolidated profit after tax for the January-March quarter plummeted to Rs 76 lakh, down from Rs 20.09 crore in the same period last year. The sharp decline comes as consumers, grappling with inflationary pressures, reduced their spending on dining out and delivery services, despite McDonald's efforts to attract them with discounted prices.

The broader context of India's quick-service restaurant industry reflects ongoing struggles to attract customers amid persistent inflation and heightened competition from local players. Despite offering affordable value packs, Westlife and its counterparts have found it challenging to capture consumer attention, particularly as food inflation remains elevated.

During the quarter, Westlife witnessed a nearly 6 per cent increase in total expenses, outpacing the modest 1.6 per cent growth in revenue. This disparity reflects the pressure faced by the company amid challenging market conditions.

As of now, other major players in the industry, including KFC-operator Devyani International, Pizza Hut-operator Sapphire Foods, and Domino's India-franchisee Jubilant FoodWorks, are yet to report their quarterly results.

Meanwhile, McDonald's, the US-based parent company, also reported disappointing quarterly profits, attributed to reduced consumer spending and sluggish international sales.

Following the announcement of Westlife's financial results, the company's shares fell by as much as 7.7 per cent.

(With Reuters inputs)