Due to weak demand and increased costs, Westlife Foodworld, the company that runs McDonald’s restaurants in west and south India, announced a sharp decline in first-quarter earnings on Thursday. This news caused a 4% decline in the company’s shares.

For the three months ending June 30, the combined profit after taxes decreased by 89% to 32.5 million rupees ($388,412.17).

Despite the T20 Cricket World Cup and the school vacation time, India’s quick-service restaurant (QSR) businesses had a slow quarter as cash-strapped consumers reduced their out-of-home dining. Higher deliveries were masked by a fall in Westlife’s dine-in revenues.

During the quarter, Westlife’s same-store sales decreased by 6.7%. The firm claimed in a statement that “royalty costs” increased by over 7% to 6.17 billion rupees, but it did not provide any more information.

The operating revenue remained relatively stable at 6.16 billion rupees.

According to Chairperson Amit Jatia, “the quarter’s results reflect the ongoing challenges in the operating environment.”

Westlife experienced its worst day in a month as its shares finished 2.3% down.

(Adapted from EconomicTimes.com)