Barbeque Nation Q3 Results Review - Weak Same-Store Sales Growth; Better Margin Delivery: Motilal Oswal

Motilal Oswal Report

Barbeque Nation Hospitality Ltd.'s delivered flat revenue growth in Q3 FY24, led by 5% YoY decline in same-store-sales. Weak demand continues to adversely impact the growth metrics; similar trend witnessed across brands/formats. Dine-in revenue was flat, while delivery was up 5% YoY.

Gross margin was healthy at 68% (plus 120/200 basis points YoY/QoQ) and support the overall operating performance. Despite the challenging growth trajectory, operating margin improved by over 100 bp YoY.

However, profit before tax margin at ~2% is still much lower than quick service restaurant players.

The management is looking to add 25-30 stores in FY25, despite a sluggish demand environment.

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