Pizza Hut Drags Down Sapphire Foods’ Q1 as KFC Gains Fail to Offset Loss

Sapphire Foods India Ltd, one of the leading franchisees for KFC and Pizza Hut in the region, reported a consolidated net loss of ₹17.38 million for the first quarter of FY26. This result has reversed the profit of ₹81.86 million recorded during the same period last year.

Despite the bottom-line setback, the company’s revenue rose 7% year-on-year to ₹7,748 million in the June quarter. However, rising operational costs weighed heavily, with total expenses climbing to ₹7,854.52 million from ₹7,117.19 million in Q1 FY25.

Earnings before interest, tax, depreciation, and amortization (EBITDA) slipped 13% year-on-year, with margins narrowing to 12.2%.

KFC continued to be a bright spot in Sapphire’s portfolio, delivering an 11% revenue increase, although its same-store sales growth (SSSG) remained flat. In contrast, Pizza Hut dragged performance down with a 5% revenue drop and an 8% decline in SSSG.

Overall, restaurant sales grew 8% YoY to ₹7,748 million. International operations performed well, with Sri Lanka reporting robust double-digit same-store sales growth. In that market, revenues rose to ₹1,164 million, up 19% from ₹978 million in the same quarter last year.

The company added 11 new outlets during the quarter—8 KFCs and 2 Pizza Huts—bringing its total store count to 974 across India and Sri Lanka. Same-store sales growth, a key indicator of performance in the foodservice sector, measures revenue changes in existing restaurants operational for at least a year, excluding new outlets.

(Source: PTI)