JUBLFOOD Q2 FY24 earnings call.
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Revenue
₹1,369 Cr
verified against source
Revenue YoY
4.5%
reported change
EBITDA
Pending
latest reported figure
Source
screener in enriched
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Jubilant Foodworks reported a soft Q2 FY24 with revenue growth of 4.5% YoY, missing internal targets. Domino's like-for-like remained negative at -1.3% YoY, though average daily sales for mature stores showed sequential growth of 1.4% QoQ, indicating stabilization. The company arrested the YoY decline in average ticket size, posting two consecutive quarters of sequential improvement. Management highlighted multiple structural investments underway, including expanding Domino's regional structure from 4 to 7 regions, launching the ACE 2.0 store format, beginning Mumbai commissary construction, and deploying Project Vijay for cost optimization. The Cheesy Rewards loyalty program now has 19.5 million enrolled customers contributing ~50% of September orders. Domino's network reached nearly 1,900 stores, on track for 200+ new openings in FY24. New brands—Popeyes (20 stores, targeting 30 in FY24) and Hong's Kitchen (18 stores)—continue scaling. Near-term EBITDA margins face headwinds from wage inflation (~8-9%), frontline hiring investments, and new regional structure costs. Management projects medium-term Domino's SSG potential of 5-6% with total growth of ~15% combining store expansion and like-for-like gains. Key risk: persistent vegetable and cheese inflation continues compressing margins while demand remains volume-led but value-focused.
Colored figures show movement against the previous available record.
Guidance to track
- Management models 5-6% same-store sales growth for Domino's driven by multi-channel expansion (dine-in, carryout, aggregator, app, IRCTC), technology-led de-bottlenecking via 20-minute delivery, and future price increases.
- Combining 5-6% SSG with ~12% network expansion through new store openings, management targets ~15% total revenue growth. This excludes contributions from Popeyes and Hong's Kitchen.
- CEO stated belief that EBITDA margins should be 150-200 basis points higher than current levels. Management achieved ~100 bps improvement in Q1 FY24 and held margins in Q2 despite salary hikes and new investments.
- Domino's India targeting 200+ new stores (band 200-225) with H1 at 73 stores; H2 expected to be back-ended due to seasonal considerations. Popeyes targeting 30 stores with 9 opened in H1 across 4 new cities.
Risks flagged
- Vegetable and cheese prices remain elevated without deflation. Management absorbed this through gross margin initiatives (local corn sourcing, combo penetration via data analytics, discount sharpening) but face ongoing headwinds. Minimum wage inflation runs 8-9% annually.
- Customers are ordering smaller pizzas (large to medium, medium to regular) to reduce ticket size, though per-order item quantities remain stable. This volume-over-value shift constrains revenue growth and margins in a demand-sensitive environment.
- Management made conscious choices to invest incremental margins in new regional structure (4 to 7 regions), frontline hiring, dine-in experience, and technology. These investments support long-term growth but create short-term margin pressure.
- Kunal Vora (BNP Paribas) pressed on why store additions at 10% CAGR and sales at 8% CAGR produced flat operating profit over 4 years, questioning what gives confidence in 5-6% SSG and 15% total growth going forward. Management did not fully address historical performance gap.
Key quotes
- We believe our right place is to be anywhere 150 to 200 basis points higher than our current levels of EBITDA. We've held on to EBITDA levels for last two quarters. In last quarter, we improved by nearly 100 basis points. This quarter we did invest in the frontline teams... Despite the salary hike, despite the investment, we've held on to the EBITDA margin, which I think is a very positive story.
- Every four or five years, the design or the palette for design changes, we're adopting to more vibrant, more colorful design, without adding to CapEx or store sizes.
- Customers have chosen to downgrade from a large to medium or medium to regular. We do see that trend, but volumetrically, the items or quantities per order is not degrowing, right? So they're still consuming the same amount of calories or same amount of number of items, but they're choosing a lower price point item.
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