KFC and Pizza Hut operator in India reports Rs 1.73 crore loss in Q1

Mumbai: Sapphire Foods India, which operates KFC and Pizza Hut in India, reported a net loss of Rs 1.73 crore for the first quarter of FY26, ending June 30, marking a significant downturn from a profit of Rs 8.18 crore in the same quarter last year.

Despite the loss, the company posted an 8.16 per cent year-on-year increase in revenue from operations, which rose to Rs 776.8 crore. Total income also grew by 8.31 per cent to Rs 783.6 crore, up from Rs 723.5 crore in Q1 FY25. However, a sharper 10.4 per cent rise in total expenses, to Rs 785.4 crore from Rs 711.7 crore, weighed down profitability.

The company attributed the subdued performance to a dip in consumer spending on discretionary items amid high living costs, which has hit the fast-food industry hard.

To boost demand, both KFC and Pizza Hut rolled out promotional campaigns. KFC offered its "epic savers" deal, nine pieces of fried chicken for Rs 299, while Pizza Hut added free Pepsi to select pizza orders. However, these initiatives failed to drive meaningful gains in same-store sales.

KFC's same-store sales remained flat, while Pizza Hut recorded an 8 per cent decline in the Indian market during the quarter.

Despite the pressure on margins, Sapphire Foods continued its expansion strategy, opening several new outlets across the country over the past year. This network growth supported revenue performance, even as profitability and same-store sales lagged.

Sapphire Foods is one of Yum Brands' two franchise operators in India, running hundreds of KFC and Pizza Hut restaurants nationwide.