KFC India operator Sapphire swings to quarterly profit as discounts prop up demand
YUM•Quarterly profit on higher demand
July 24 (Reuters) - Pizza Hut and KFC operator Sapphire Foods India SAPI.NS swung to a quarterly profit on Friday, as fast-food restaurants lured more consumers with discounts, sending its shares up 2% in afternoon trading.
Sapphire, a franchisee for U.S.-based Yum Brands YUM.N, reported a consolidated net profit of 140.4 million rupees ($1.46 million) for the April-June quarter, compared with a consolidated net loss of 18 million rupees a year earlier. In the March quarter, its loss was 126.1 million rupees.
Costs rise and merger remains in focus
Total expenses rose 12% to 8.8 billion rupees in part due to high energy costs.
Sapphire and larger peer Devyani International DEVY.NS, which also runs KFC and Pizza Hut restaurants, said in January they would merge in a $934-million deal, creating a franchisee with more than 3,000 locations.
($1 = 96.4275 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai; Editing by Mrigank Dhaniwala)
((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))
Discounting lifts sales at KFC and Pizza Hut
Large restaurant chains have launched items at lower prices and offered discounts as they face increasing competition from newer rivals such as California Burrito, Wow Momo and Blue Tokai Coffee.
KFC promoted its Chicken Krisper Meal — comprising a burger, fries and a Pepsi — for 99 rupees, down from 237 rupees, while Pizza Hut offered a four-course meal at the same price.
