Q3 FY24-
Slow growth bcz of mix of both which is decline in consumer demand, discretionary spends and also increased supply which is for restaurants.(many organised and unorganised Restaurant opened up, but to see how many survive)
And there has been better realization on our beverages. There are some offers that used to run on beverages, which once we removed, we haven’t seen any impact on those beverage sales and has positively contributed to our gross margin.(Beverage is a higher margin product)
We plan to add 25-30 new restaurants in FY25 and broadly 50% of this will be for Barbeque Nation brand and the balance 50% would be for both Toscano and Salt
So, barring the reclassification adjustment there is approximately 2%-2.5% improvement in gross margin between quarter one and quarter three
Like I said there are four attributes of margin improvement. First one is improvement in gross margin. Second is the impact of portfolio rationalization, which means that some of the closed store margins are obviously dragging. And the new store that now added to the matured portfolio they are performing better than what the closed stores were performing. So, overall percentages have improved. Third is obviously cost initiative, the multiple initiatives taken some of the examples that I gave recently, and fourth is operating leverage.
So, if the revenues dip in quarter four, then to some extent margins will dip only to the factor of operating leverage, but the other three initial factors will continue to play
So, basically if I were to just say it in a nutshell supposing if you deliver, let’s say 4% to 5% positive SSSG in FY25, then the full year margins would be possible in that 13.5% to 14% region
We can do two to three international stores. International business is delivering around 20% EBITDA margin. So, there is cash accumulation there and we may open new stores based on the availability of good sites, we will utilize that same cash to expand.