{"id":155318,"date":"2023-10-26T06:46:58","date_gmt":"2023-10-26T10:46:58","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155318"},"modified":"2023-10-26T06:46:59","modified_gmt":"2023-10-26T10:46:59","slug":"jubilant-foodworks-limited-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/jubilant-foodworks-limited-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Jubilant FoodWorks Limited Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Jubilant FoodWorks Limited (JUBLFOOD) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Quarterly Results<\/strong>\n<ul>\n<li>5% revenue growth below expectations, but Domino\u2019s sees signs of recovery.<\/li>\n<li>Focus remains on delivery growth, store reimaging, loyalty program, and innovative formats to drive growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Domino\u2019s Reorganizes Regional Operations<\/strong>\n<ul>\n<li>Nearly 1900 Domino\u2019s stores restructured into 7 regions for improved execution, aiming for 3000 stores.<\/li>\n<li>Investment in new structure seen as bolstering competitive advantage in operational excellence.<\/li>\n<li>Improved new store openings by using data, including out-of-delivery area pings, to identify prime locations, resulting in stronger initial sales.<\/li>\n<li>On track to meet guidance of 200+ new Domino&#8217;s stores and 13 Popeyes stores this fiscal.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Long-Term Growth Investment Focus<\/strong>\n<ul>\n<li>Operating margins invested in new regions, hiring, dining experience, technology this quarter.<\/li>\n<li>The company expects these investments to affect short-term margins, but they are viewed as essential for maintaining long-term growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Update on Other Brands<\/strong>\n<ul>\n<li>Popeyes gaining traction with bold flavors and strong customer response.<\/li>\n<li>Hong&#8217;s Kitchen metrics ahead of targets with 18 stores across 3 cities.<\/li>\n<li>11 of 21 new Dunkin&#8217; stores in coffee-first format.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Same-Store Sales Growth (SSG)<\/strong>\n<ul>\n<li>Domino\u2019s menu innovations and analytics reverse sales decline over the last 2 quarters.<\/li>\n<li>Domino&#8217;s is more optimistic about SSG in the second half of the year.<\/li>\n<li>SSG was lower this quarter due to fasting days and exams, but mature stores still growing at 1%.<\/li>\n<li>20-minute delivery cities seeing positive SSG, Tier 1 cities were positive this quarter due to superior delivery despite rains.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Store Economics<\/strong>\n<ul>\n<li>Domino&#8217;s re-imaged 33 stores in Q2 and is on track to re-image 100 stores by FY 2024.<\/li>\n<li>Re-imaging involves full store revamp for enhanced operations and customer experience.<\/li>\n<li>Re-imaged stores called S2 stores, with enhanced furniture, seating, segregated operations, and upgraded systems.<\/li>\n<li>Reimagined stores seeing high double digit dine-in growth.<\/li>\n<li>Seeing sharpest ticket size increase in dine-in, but no timeline on when overall dine-in will recover.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Impact on Margins<\/strong>\n<ul>\n<li>Inflation levels for cheese and vegetables remain elevated, negatively impacting Domino&#8217;s margins.<\/li>\n<li>Was hit by wheat price increases in the previous quarter.<\/li>\n<li>Seeing 8-9% wage inflation in line with minimum wage hikes.<\/li>\n<li>Able to absorb wage inflation due to driving higher efficiency.<\/li>\n<li>Despite inflationary pressures, Domino&#8217;s has taken steps like Project Vijay to drive internal efficiencies and hold EBITDA margin steady.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Store Expansion and Densification Driving Growth<\/strong>\n<ul>\n<li>Focus on upgrading delivery with initiatives like 20-minute delivery target showing results.<\/li>\n<li>Domino&#8217;s remains bullish on growth potential from increasing presence via new stores in under-penetrated locations.<\/li>\n<li>Product feedback for Popeyes and performance in Tier 2\/3 cities positive so far.<\/li>\n<\/ul>\n<\/li>\n<li><strong>New Store Openings<\/strong>\n<ul>\n<li>Q1 typically slower for new store openings, but pace increased from 23 in Q1 to 50 in Q2.<\/li>\n<li>Currently in 400 cities, most penetrated QSR chain.<\/li>\n<li>Will enter new city if store economics and sales threshold makes sense.<\/li>\n<li>Confident that total new stores will be closer to 200 or 225 target this year.<\/li>\n<li>Finding enough pipeline to open stores in right locations with high quality.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Outlook<\/strong>\n<ul>\n<li>Domino\u2019s targets 5-6% sales growth and 12% unit expansion for 15% overall growth.<\/li>\n<li>Underlying consumer demand still remains somewhat muted.<\/li>\n<li>Customers downsize pizzas, lowering order values but increasing order count.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Loyalty Program Success<\/strong>\n<ul>\n<li>TV Rewards loyalty program launched historically for first time in India for a QSR.<\/li>\n<li>Nearly half of orders come from enrolled loyalty members.<\/li>\n<li>Seeing high customer retention and frequency for enrolled members.<\/li>\n<li>No major increase in discounts from program as seen by gross margin improvement.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strong Volume Growth<\/strong>\n<ul>\n<li>Had best quarter ever for order volume showing real volume growth.<\/li>\n<li>Delivery orders have been among highest in recent quarters.<\/li>\n<li>Value menu re-launch contributing to volume growth.<\/li>\n<li>Confident commissary model supporting value, taste and faster delivery will drive growth.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Jubilant FoodWorks Limited (JUBLFOOD) Q2 FY24 Earnings Concall Quarterly Results 5% revenue growth below expectations, but Domino\u2019s sees signs of recovery. Focus remains on delivery growth, store reimaging, loyalty program, and innovative formats to drive growth. Domino\u2019s Reorganizes Regional Operations Nearly 1900 Domino\u2019s stores restructured into 7 regions for improved execution, aiming [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,6351,392],"tags":[10573,10169,2833,10574],"class_list":["post-155318","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-consumer-stocks","category-earnings","tag-dominos","tag-earnings","tag-food-and-beverages","tag-pizza"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":149828,"url":"https:\/\/alphastreet.com\/india\/jubilant-foodworks-ltd-q1-fy24-74-fall-in-profits\/","url_meta":{"origin":155318,"position":0},"title":"Jubilant Foodworks Ltd Q1 FY24; 74% fall in Profits","author":"Hardik Bhandare","date":"July 25, 2023","format":false,"excerpt":"Jubilant FoodWorks Limited (JFL\/Company) is part of the Jubilant Bhartia Group and is one of the India\u2019s largest food service Company. 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