Pizza Hut India operator misses Q1 estimates on weak demand, surging costs
Adds details in paragraph 8 and 9
BENGALURU, July 30 (Reuters) -Sapphire Foods India SAPI.NS, which operates the Pizza Hut and KFC chains of restaurants, reported a larger-than-expected decline in its first-quarter profit on Tuesday, as costs rose while it struggled to entice budget-conscious customers.
The Yum Brands YUM.N franchisee reported a consolidated net profit of 85.2 million rupees ($1.02 million) for the quarter ended June 30, missing analysts estimate of 173.9 million rupees, according to LSEG data.
India's quick-service chains have been struggling to attract customers amid persistent inflation, which remained around 5% during the quarter.
Financially-strained consumers have been cutting back on dining out and ordering in.
Prices of key raw materials including cheese, chicken and tomato have also been rising.
Sapphire Foods India's revenue from operations rose 10% to 7.18 billion rupees, but came short of analysts' estimate of 7.23 billion rupees.
The company said prices of ingredients rose nearly 10%, expanding its total expenses by 13% to 7.12 billion rupees.
Sapphire's same store sales fell 6% and 7%, respectively, for its KFC and Pizza Hut outlets in India.
The company, which also operates KFC and Pizza Hut chains in Sri Lanka and Maldives, said the "KFC chain was impacted the most" by a shift in the dates of a festival when Hindus typically reduce consumption of meat.
Rivals McDonald's MCD.N India operator Westlife Foodworld WEST.NS reported a plunge in first-quarter profit amid frail demand, while Burger King's India operator Restaurant Brands Asia RESR.NS reported a narrower first-quarter loss as offers and discounts swayed customers.
Devyani International DEVY.NS, which also operates KFC outlets in the country, and Domino's India-franchisee Jubilant FoodWorks JUBI.NS have yet to report results.
($1 = 83.7350 Indian rupees)
Reporting by Ashna Teresa Britto; Editing by Mrigank Dhaniwala
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