McDonald's India franchisee Westlife posts Q1 profit drop on higher costs, weak demand

BENGALURU (Reuters) -Westlife Foodworld, the operator of McDonald's restaurants in west and south India, reported a plunge in first-quarter profit on Thursday amid frail demand and higher expenses, sending its shares down as much as 4%.

Consolidated profit after tax fell 89% to 32.5 million rupees ($388,412.17) for the three months ended June 30.

India's quick-service-restaurant (QSR) brands continued to grapple with sluggish demand in the quarter despite the T20 Cricket World Cup and a school holiday period, as cash-strapped consumers cut back on dining out. The decline in Westlife's dine-in sales overshadowed higher deliveries.

Westlife's same-store sales fell 6.7% during the quarter. Its expenses swelled around 7% to 6.17 billion rupees, led by a surge in "royalty costs", the company said in a statement without giving further details.

Revenue from operations was little changed at 6.16 billion rupees.

"The quarter's results reflect the ongoing challenges in the operating environment," said Chairperson Amit Jatia.

Westlife's shares ended 2.3% lower, logging its worst day in a month.

($1 = 83.6740 Indian rupees)

(Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng)