May 15 (Reuters) - Devyani International, the operator of KFC and Pizza Hut outlets in India, posted a smaller quarterly loss on Friday, as strong same-store sales growth at KFC outlets and higher revenue helped offset higher costs.
The company, a franchisee of U.S.-based Yum Brands, reported a consolidated net loss of 100.4 million rupees ($1.05 million) for the quarter ended March 31, compared with a loss of 147.4 million rupees a year ago.
The results come at a time when India's quick-service restaurant (QSR) sector is battling weak urban demand, prompting chains to rely on discounts, promotions, and value meals to drive traffic.
The Gurugram-headquartered company said value-led offerings and customer engagement campaigns helped sustain sales at KFC, while disruptions linked to the recent cooking gas shortage due to the Middle East conflict had a minimal impact on operations.
Brokerage Elara Capital said earlier this week that a sustained recovery in dine-in demand could meaningfully boost earnings for QSR operators, including Devyani International.
Devyani added 217 net new stores during the financial year, taking its total store count to 2,256 as of March-end.
The company said that while "external and seasonal factors remain fluid", it was optimistic about demand conditions during the year.
Revenue from operations rose 18.5% to 14.37 billion rupees for the reported quarter.
Shares of the company, which were down as much as 1.9% before the results, trimmed losses and were last up 0.13%.
KFC India posted 4.9% same-store sales growth during the quarter, its strongest performance in 14 quarters, the company said. Revenue from the brand rose 14.6% year on year.
Pizza Hut India's revenue, however, fell 3.5% year-on-year during the quarter, highlighting persistent pressure on discretionary spending in the QSR sector.
($1 = 95.8800 Indian rupees)
Reporting by Surbhi Misra in Bengaluru; Editing by Rashmi Aich
Source: Reuters