Americana Restaurants International PLC (AMR) Earnings Call Transcript & Summary

Good evening, everyone, and thank you for joining us today for Americana Restaurants Quarter 1 2025 Earnings Call. I am Pujeet Parekh, Head of Investor Relations and Business Development at Americana Restaurants. Before we begin, I'd like to remind you that today's presentation may include forward-looking statements based on current expectations and assumptions. Joining me today are Amarpal Sandhu, our Chief Executive Officer; and Harsh Bansal, our Chief Financial Officer and Chief Growth Officer. We'll begin with opening remarks from Amar, who will walk us through the overall performance of our business for the quarter. Harsh will then provide a detailed financial overview. After that, we'll open the floor to your questions. With that, I'll now hand it over to Amar.

Thank you, Pujeet. Good day, everyone, and thank you for joining us today. Before we dive into our financial results, I want to take a moment to reflect on something at the heart of our business, which is our purpose. At Americana, building communities around the joy of food is more than a tagline. It is the guiding principle. And by communities, we mean everyone who shapes our journey from our dedicated team members and valued partners to the customers we proudly serve and the wider communities we are committed to support. This shared commitment drives our culture, fuels our innovation and keeps us focused on delivering sustainable long-term growth. We are proud to share that this past quarter, Americana Restaurants was recognized at Yum!'s 2025 Global Franchise Convention with several key awards that align with our strategic focus, including the Modern Design Portfolio Award, the Global Digital Driver Award and the most coveted Yum!'s Growth Partner Award presented by Yum!'s Global CEO. Also as part of our ongoing focus on digital transformation, our self-service Kiosk's rollout has yielded impressive results with a 200% increase in transactions this quarter. Beyond speed and convenience, these platforms provide valuable customer insights, allowing us to further personalize offerings and elevate the guest experience. We also hosted a successful Partners Summit this quarter, bringing together our suppliers and strategic partners. It served as a powerful platform to synchronize our business priorities, uncover new growth prospects and strengthen collaboration across our ecosystem. And during the holy month of Ramadan, which was March, we deepened our CSR efforts across all 12 markets, reaching vulnerable families and orphan children, a reflection of our enduring commitment to creating meaningful impact in the communities we serve. Next, moving on to the Q1 performance update. We entered the year with a clear focus on accelerating recovery and maintaining momentum across our core markets. Our portfolio has grown to 2,630 stores across 12 countries, representing a net addition of 174 stores in the last 12 months. This reflects disciplined and strategic expansion. Revenue for quarter 1 reached $573.4 million, reflecting a strong 16.2% year-on-year increase. This growth was driven by a 13.9% increase in like-for-like sales on the back of continued value offerings and product innovation and great experiences for our guests. The business achieved the EBITDA of $121.7 million, up 17.4% year-on-year and net profit of $32.6 million, a 16.5% increase versus quarter 1 of 2024. This was primarily driven by strong revenue growth and improved gross margins through effective cost management. Additional details on financials will be provided by Harsh in the financial section shortly. We maintained capital discipline with a CapEx of 4.8% of revenue this quarter, reflecting our commitment to prudent investment and financial strength. Now let's take a closer look at the evolution of our restaurant network. Despite the external challenges over the past 12 to 18 months, we have continued to expand our footprint, particularly in less impacted markets. As shown on the chart to the left, we opened 190 new restaurants, majority of which were power brands with 159 openings and 31 of our growth brands. Additionally, we strengthened our presence with the integration of Pizza Hut Oman, adding 46 new restaurants to our portfolio. Our total restaurant count, as I mentioned earlier, stands at 2,630 as of the close of quarter 1. Now on the right-hand side of the slide, you will observe our pipeline remains strong. We are well positioned to deliver our full year guidance of 150 to 160 net new openings. With that, I will now hand over to Harsh for the financial deep dive.

Thank you, Amar. As mentioned by Amar earlier, we have seen a strong recovery in Q1 2025 compared to Q1 of last year. We recorded a 16.2% increase in overall revenue compared to Q1, reaching $573 million revenue for the quarter. This growth was primarily driven by LFL contribution of $65 million, in addition, $35 million contribution coming from new store openings. We did have an FX impact of $14 million, which was largely driven by currency devaluation in Egypt in Q1 of last year. We continue to build on the recovery and are double-digit LFL sales positive, if you look at the table on the bottom left versus Q1 2024. Even compared to Q1 2023, adjusted for Ramadan seasonality, like-for-like sales are negative 8.5%. Transaction recovery has been faster than the sales recovery driven by continued focus on transaction growth. One important milestone is that our total sales have surpassed Q1 2023 levels, and we are positive compared to Q1 2023. In terms of brand contribution, power brands remain the core of our business, contributing 94% of our sales with KFC, Pizza Hut and Hardee's leading the way. Around 84% of our revenue come from currencies -- countries with stable OPEC currencies slightly higher from last year. Lastly, looking at the channel mix on the bottom right, home delivery continues to grow from a share perspective and now represents around 46% of our total sales. This is 5% higher, if you compare to Q1 of 2024. This share has been increasing since Q4 2023 and is primarily driven by consumer behavior as well as impact of geopolitical crisis. Moving from revenue to profitability. We have delivered double-digit growth across all key profit metrics in Q1 of 2025. Starting with 4-Wall EBITDA, we recorded $158 million of EBITDA, which is 10.8% higher compared to Q1 last year. We have maintained a strong margin of 27.5%, despite an increased selling and distribution cost. EBITDA also grew by 17.4% and reached $122 million with the margin at 21.2%, in line with last year, demonstrating robust flow-through of the incremental revenue to the bottom line despite higher selling and distribution costs, as highlighted earlier. Net profit attributable to shareholders stood at $32.6 million, representing a 16.5% increase over Q1 of last year. Margin remained in line with last year, and we will do a deep dive on net income movement on the next slide. As mentioned, our reported net profit for Q1 is $32.6 million with a margin of 5.7%. Net income for Q1 2024 after adjusting for one-offs was $20.6 million with a margin of 4.2%. One-offs include net impact of marketing reliefs and Egypt FX devaluation in Q1 of 2024. Against the normalized base, we have delivered $22.9 million uplift, primarily driven by revenue growth despite $3.5 million of additional tax impact on account of Pillar 2. Overall, we have achieved strong flow-through and have preserved our margins, showcasing the robustness of our business model and effectiveness of our cost controls. This highlights our ability to navigate challenging environment and underscores the efficiency of our operations. Moving on to working capital and capital expenditure. Net working capital remained stable at minus 8.9%, representing $202 million negative, similar to Q4 of 2024. This position reflects effective inventory management as well as supplier payables. Given the Eid break during the last week of March, it has higher receivables, which will get normalized by Q2. On the CapEx side, we have spent $28 million in Q1 2025, up from $22 million in Q1 of 2024. This includes the CapEx on new store openings as well as the purchase price consideration for the Pizza Hut Oman business. Overall, CapEx represented 4.8% of revenue, which is broadly in line with the historical trends. We remain disciplined in capital deployment and continue to focus on long-term growth strategy. On that note, I will conclude the financials, and I will hand it over to Amar to provide guidance for the balance of the year.

Thank you, Harsh. Before we open the floor for Q&A, I'd like to briefly reaffirm our 2025 guidance. There are no changes to our outlook. Our focus remains consistent and firmly aligned with our strategic pillars. On revenue, we will continue to prioritize transaction recovery and average check growth, both critical levers for sustainable top line performance. On new store guidance, our guidance stands at 150 to 160. However, we will continue to monitor it very closely and have a very disciplined approach to new store openings. The primary focus is -- for expansion is across UAE, Saudi Arabia, Kuwait and Iraq. This guidance is further complemented by the integration of stores acquired through our recent acquisition of Pizza Hut Oman. Operational efficiency remains a priority. We are enhancing inventory management and maintaining a healthy level of net working capital. We expect gross margins to remain in line with 2024, supported by stable commodity costs and continued operational efficiency. The setup of our center of excellence in India will further strengthen our digital and enterprise capabilities. We remain committed to both organic and inorganic growth in line with our long-term platform strategy, supported by a clear focus on value leadership, product innovation and tapping into new day parts. On the digital front, we are committed to enhance our omnichannel experience, deepen customer engagement and strengthen brand loyalty. Our loyalty programs are being scaled up across KFC, Pizza Hut and Hardee's alongside the development of a customer data platform to enable more personalized engagement and drive customer lifetime value across all our brands. As we conclude, I want to leave with a clear message and reaffirm our confidence in the long-term strength of our brands and the markets we operate in. Our strategic priorities of transaction recovery and smart expansion with a culture of operational efficiency and innovation are commitments we are delivering against every day. We've built a resilient platform with the agility to navigate challenges and the vision to lead in evolving market conditions. Our investment in technology and the expansion of customer engagement capabilities position us well for sustained growth. And above all, our promise to our customers remains unchanged to serve great tasting, high-quality food at exceptional value. And it is this principle that drives loyalty, trust and long-term shareholder value. Thank you once again for your time today. We now welcome your questions.

[Operator Instructions] So our first question comes from Julius Bottcher from Fiera Capital.

I just wanted to clarify on the openings guidance, do you include the M&A in Oman within that guidance? Or is that incremental?

No, the M&A of Oman is incremental to the 150 to 160 guidance.

Okay. Perfect. And just to follow up on that. I mean, I was looking that if I take out the Oman bit, the -- there were very few openings in the first quarter. And in fact, there were, as I counted closures and net closures in, for example, Saudi Arabia. So I wonder, is that a first quarter effect? And then just a second question, just on Oman. It did strike me the revenue number that was disclosed, if I just look at that per restaurant, it is well below the sort of group average and the Pizza Hut average. So I just wanted to understand why that is so low and whether there is opportunity to lift that?

Sure, Julius. So on the first question, I would say a very good observation. Yes, we took most of the closures early in Q1, and that is the effect but the NSOs will normalize over the balance 3 quarters. So our pipeline is strong. As you can see, we have 40 new ones under construction right now and another 100 plus that are in advanced stages. So at least at this point, we don't see any risk to the 150 to 160 net openings. And also part of the reason is we pushed hard in Q4 or in December of last year to deplete the pipeline, to make sure that we hit our targets and the promises that we made to the markets. On Oman, yes, the revenues -- Oman was one of the worst hit countries because of the boycotts. And that was the reason why the revenue was suppressed. However, to your point, there is tremendous opportunity. Pre-crisis, the Oman Pizza Hut numbers were pretty healthy. And again, we are working towards getting them to the same levels. Now we've only had the business in our control since January. KFC, on the flip side, we are seeing really good recovery in Oman, and we'll be doing the same with Pizza Hut as well.

Our next question comes from Evgenii Annenkov from Jefferies.

I have 2, please. First, you mentioned softening of consumer demand in certain markets in the press release. Can you please give a little bit more color here? What are you seeing in the core 4 markets? And how did it develop in April? And my second question, please, is specifically on the KSA growth, which I calculate decelerated by 400 basis points on a 2-year CAGR basis. Just wanted to hear your thoughts. Do you believe you could benefit from the accelerated rollout of Keeta in the country, both in terms of market expansion, meaning new people entering QSR segment and also marketing costs? Do you believe you could improve your terms with HungerStation and Jahez.

Thank you, Evgenii. So first, your question on the softening demand. So from 4 major markets, if you look at UAE, Saudi, Kuwait and Egypt, we are seeing a robust demand in UAE and Kuwait. In fact, Kuwait has been very strong in Q1 and the momentum continues. And UAE also has been robust, and we are not seeing any demand pressures in UAE as well. In fact, the business is doing well and the decline in UAE was the lowest from a geopolitical standpoint. Now Saudi, while there is -- with Keeta coming in, home delivery as a share has gone up, but it is also -- part of it is cannibalizing some of the other channels. So while home delivery has gone up, but we are seeing some pressure, especially on the pricing side in Saudi with the value demand or the consumers asking for value increasing. And that's the market which we are watching closely, and there is a focus to become more efficient as well as to continue to build on the demand as well as to work with all the aggregators. On Egypt, also, we have seen a good recovery, in fact, on both top line as well as bottom line, and the business is doing much better, and we'll continue to work on bringing Egypt closer to the overall portfolio level from a margin perspective. With regards to Keeta, it's always better to have more and more players in the aggregator space because it helps to create competition. And yes, so while it is difficult to quantify the exact impact on the commissions and the margins, but for sure, with Keeta coming in, there is pressure on some of the other players also to offer more, I would say, lucrative deals, especially on reduced delivery fee, discounts and others. So that is helping overall the restaurant business.

Our next question comes from Taher Safieddine from JPMorgan.

It's Taher from JPMorgan. Just maybe 2 questions from my side. The first question is really on the -- this one-off marketing costs. I mean it hasn't been really flagged to us earlier, the $7 million. And now it seems if you adjust, clearly, there has been a decent recovery. But my question is, the $7 million, is it reflected in SG&A in terms of -- in the numbers, just to understand in terms of marketing costs? And is there any other marketing benefits that you received in Q2, Q3, Q4? The reason I'm asking is just to understand the year-over-year trends on a clean basis because if I look at the numbers, Harsh, in terms of margins, and correct me if I'm wrong, gross margins have expanded by around 130 basis points, but your adjusted EBITDA margins are only up 20 basis points. So I'm just -- I mean, clearly, there is operating leverage with the business, as the top line improve, but we haven't seen those benefits trickling at the EBITDA line. So maybe if you can elaborate on that part would be really helpful.

Sure, Taher. So as I said earlier during the presentation, there was a one-off relief, which was given in Q1 of last year. And the net impact of that was close to $7 million in Q1 2024. From Q2 onwards, we were spending the marketing as per our contractual commitments. So there is no -- we don't expect any further impact from a comparison standpoint to last year, and that would even out. So that is one. And secondly, yes, for sure, there is operating leverage on the business. And -- but there has also been some impact because of home delivery with the share going up. There has been some impact on the margin side from the home delivery. Having said that, still with double-digit like-for-like recovery, Q2 onwards, you would see a better flow-through given the one-off relief, which we got in Q1 would even out, and it won't be going into Q2 onwards in 2024.

And sorry, just a follow-up on this one. The marketing relief of $7 million, was it booked in SG&A in Q1 '24?

No, it was just, Taher, a lower spend. So if you look at, that's why the SG&A cost is lower. So...

Okay. All right. The second question is I've noticed that in this presentation, the average daily sales chart is not there. And this was, I mean, quite helpful in the previous quarters just to understand the trends where we are versus last year and the pre-boycott. So I think 2 questions here. Is there a reason why you've discontinued disclosing the average daily sales on a monthly basis? And naturally, my second question is going to be, how are we looking on the average daily sales post March quarter end, specifically Eid onwards? If you can share maybe some more visibility there in terms of how we are trending? Because I'm just keen to understand the LFL is now 8.5% below Q1 '23. How do you see this trending by the end of the year? Is there room for us to close that gap fully or at least come closer to neutrality with the pre-boycott levels on an LFL? Or is that still too ambitious?

Taher, on your first observation on -- we're not sharing the LFL chart. The reason is, if you look at 2024, we are already 16.5% positive. And on an LFL versus Q1 2024, we are close to 14%. Now the -- I mean, the line won't have done any justice given we are comping against 2024. And that's why we have specifically called out not only Q1 2024, but also Q1 2023 so that there is a comparison to an extent a cleaner base, which gives you where we were in Q1 of 2023. Now to your -- so that's why we have given enough visibility to sort of provide a trend versus last year as well as 2023. Now on your second question, which is, yes, the intent is to continue to bridge the gap. And as I mentioned earlier, while overall impact versus Q1 2023 is minus 8.5%. But on a transaction basis, in fact, we have already bridged more. So the sales decline is higher than the transaction decline, and we'll continue to focus on that. Q4 2023 anyway was not a clean quarter, but during the course of the year, we are continuing to bridge the gap with an intention to get to LFL flat versus Q3 2023.

So you said, sorry, just the intention is to close the gap with 2023 by the end of the year?

So, Taher the -- again, yes. We -- the reason we shared Q1 2023 is because that is a tough benchmark. That was a really strong quarter for us back in 2023. And so internally, we are holding ourselves accountable to lap over that, and that is what is built into our plans.

Our next question comes from Rishik (sic) [ Nishit ] Lakhotia from SICO.

[indiscernible] You mentioned that 8.5% was below 2023 of Q1, but maybe this is because of Ramadan as well, right? So in 2 years, you would have seen a much bigger impact. So I mean, next quarter, we should be -- if you give the same comparison from 2Q 2023 to 2Q 2024, we should see a much closer like-for-like differential. Am I right in assuming that? And so that's just a follow-up on that. And my second question is, it's clear that there is a lot of home delivery expenses that is below gross. So when you're guiding a gross margin similar but your home delivery expenses and because of the changing channels and food habits is continuing, especially in Saudi Arabia as well. So how do you intend to counter that? Are you planning to possibly increase prices, lower promotions? I mean, or should we expect some margin pressures below gross to continue? And what level of cost savings are still left from what you've achieved in last year to counter this pressure from home delivery? And finally, one on the Turkey, on the expansion side. There is a franchisee that's gone bankrupt there. Are you looking at options of expanding like Oman in Turkey as well if there's an opportunity there?

Okay. So let me go one by one, [indiscernible]. On your first question on like-for-like, just to clarify, these are adjusted for Ramadan days movement. So they are very much comparable, and we have taken the same number of Ramadan days -- any days to make sure we have a clean comparison. So there is no impact of Ramadan seasonality into our comparable numbers in Q1 versus last year and year before. So that's one. The second is on home delivery, yes, as I mentioned earlier, there has been some impact of home delivery cost on the margin. Having said that, with the double-digit like-for-like positive focus on gross margin as well as on other cost initiatives, in addition to the operating leverage coming in from positive like-for-like, we still expect to improve margins compared to 2024, but there will be some dilution on home delivery, which would be covered by efficiencies as well as operating leverage on the other lines coming in for like-for-like. So that's second. On Turkey, we continue to monitor the situation. Again, there are -- Turkey has its own sets of challenges. So, so far, there is -- there is nothing to comment or disclose. If there is anything, we'll come back to the wider audience and disclose. But for now, there's nothing which is -- which we can comment on.

Our next question comes from Ahmed Kamal from Azimut Group.

Actually, I have a couple. So first one is the -- can we quantify like in dollar terms, the impact of Ramadan seasonality on the first quarter of '25? That's the first one. The second one, looking at the quarter trends in 2023 actually in 2024, 1Q '24 and 1Q '23 were like a lower base of comparison given that the remaining quarters for '23, especially 2Q and 3Q were very strong. And as well starting the second quarter of 2024, the momentum started to pick up and the bottom line growth increased. So should we expect like further acceleration in the year-over-year growth trends or given the high base as we move into 2Q '25, this should soften a bit? And finally, on the taxation, if you can give some color on what effective tax rate should we expect?

So Ahmed, the first one, like-for-like, if you look at the chart, which we presented on Slide 8, there is around 0.4% delta on total sales between Ramadan adjusted and actual sales. So if you look at 0.5%, that would be close to $2.7 million, $2.8 million. So that is one on the dollar terms. The second is, yes, we continue to have a recovery quarter-on-quarter last year. And -- but at the same time, we also expect that we should continue to build the momentum we have in 2025 also quarter-on-quarter, while the base will continue to go up, but we are also building momentum. And as Ahmed said, intention is to bridge the gap versus 2023, which is at 8.5% in 2023 Q1. And that's what the focus is. And most of the focus is on transactions given we want to make sure the fundamental health of the business stays strong. On effective tax rate, all taxes are accounted -- or change in tax regulations have been accounted for in Q1 2025. The biggest impact actually -- impact is coming in from Kuwait with Kuwait going from practically 0% to 15%, then Qatar and Bahrain. In addition, UAE also effective tax rate has gone from 9% to 15%, which also had an impact. So the effective tax rate should be very similar to Q1 of this year going forward. You will not see any additional impacts coming in.

Our next question comes from [ Avinash Singh ] from ABI Analytics.

I just wanted to ask a couple of questions. So what is the reason for such a sharp rebound in the NFL sales in 1Q '24? And I also wanted to ask that earlier the management used to provide EBITDA breakup. But in this quarter, we saw that it is missing. And also in addition, you used to earlier also provide the data breakup for the different power brand sales. That is also, I think, is missing. So if you can provide an explanation for this and then I'll ask the next set of questions.

Avinash, the reason for the strong LFL versus Q1 of 2024 is as a result of the geopolitics and the [indiscernible] American brands. So we were -- as you know, this all started in Q4 of 2023 and Q1 of 2024, we were in the thick of that. And subsequent quarters, we have continued to recover. So hence, the strong LFL growth over 2024. As far as Power Brands breakout, we do that at the half year point and the full year point, right? That is when we give those breakdowns.

So I just wanted to ask that earlier used to be provided on a quarterly basis. And in addition, the EBITDA breakup also is not provided no more. That is why it used to be provided earlier.

EBITDA, Avinash, we have always -- I mean, EBITDA is still there, but we never have given EBITDA by brand. And...

Is not by brand, but breakup for the EBITDA, how you are arriving at the EBITDA from the net profit. That breakup used to be provided. But this time, this breakup is missing in the provision.

We gave adjusted EBITDA because there was no adjustment this year. So we have just moved away from adjusted EBITDA concept. So it is practically the EBITDA, but we are happy to add that annex from net profit to EBITDA if that is helpful. But the reason we removed that slide was because there are no adjustments to EBITDA. So it is just the normal level.

Our next question comes from Ilya Ogorodnikov from Bank of America. Ilya, your line is now open. Okay. Perhaps we will move to the next question. We have a question from Usman Siddiqui from SICO Bank.

Yes. So I have 2 questions. One is on the gross profit margin. You have mentioned having guided for the margin to be similar or slightly higher than 2024 levels for the full year '25. Yet we see first quarter '25 expansion in margins to be very strong. So are you expecting a decline in the gross margins in the next 9 months? And if yes, what would be the reason? Is it higher commodity cost or higher rents or any expense that you could mention? And my second question is basically on the average daily sales recovery. I think the management have earlier mentioned that whenever you have seen a recovery, there is no going back. I mean the sales hasn't gone down after it has recovered. So in the light of recent escalation, I just wanted to clarify or confirm, has there been any drop in sales for a new store in April, the sale that was recovered, but in the light of recent escalation that has gone down.

So first is on, Usman, gross margin. So one is, yes, we reaffirm our guidance of slightly better gross margin than 2024. The second is the -- if you look at our gross margin last year, we continued to improve gross margin quarter-on-quarter, which will also play in because there was improvement. The third is what you see in the statutory financial statements, that has some of the other costs also, it's not only food cost, and there has been some operating leverage on that. And our guidance was more so on food and packaging costs, which is purely a clean gross margin without any other people costs and rental allocations and others. But on our food cost and packaging costs, we do expect to be slightly better than 2024. And our base, though from last year continued to increase given the improved margins quarter-on-quarter. So that's first. The second is on your question on going back, yes, we have not seen -- while there has been some noise around the conflict again, but we have not seen any impact on the business in terms of we're going below where we were. Now whether we could have recovered faster is difficult to comment, but at least we have not seen any backward movement in terms of recovery.

All right. And just an observation on the presentation. Have you guys removed the slide on revenue by brands, by power brand from this quarter?

Yes, that's right, we have removed because it was split between different quarters. But given there has been sort of request by the analysts also, we will include that slide and the net income to EBITDA slide on the website in the next year or so.

Okay. We will go back to Ilya Ogorodnikov from Bank of America.

I have a question on your cost of sales. Can you please comment on the cost of inventory as a percentage of sales in the first quarter and the outlook for the rest of the year? Just trying to understand the dynamics there.

So Ilya, as I said, we reaffirm our guidance of cost of sales being slightly better than last year. And in Q1, given Q1 of last year, the cost of sales was slightly higher and we continued to improve quarter-on-quarter. We had better cost of sales in Q1 of this year versus last year. But overall, from a full year perspective, we expect slightly better gross margin than last year despite focus on value and some level of discounting.

Okay. Because -- I'm asking because you used to have this slide in your pack, maybe you can consider including this information going forward as well because it's quite helpful for us.

Our next question is from Harsh Mehta from Goldman Sachs.

I am Harsh, I just had a question. In terms of the product pipeline, culinary experience and innovation, what are the plans for this year? I saw one of your... sorry, please go ahead.

We lost you, Harsh. Can you please continue?

Yes. I was just asking what's the pipeline in terms of innovation and product innovation, especially and format changes, if any. We saw one of your competitor in the Sweet Treat has introduced a new format with a much more diversified menu, and that's been doing well for them. So I was just hoping to know what are your plans across different brands, if any, this year?

So Harsh, great question. Product innovation is one of the key focus areas across brands, across Americana. In fact, we have -- we are building and continue to build strong capability in our -- on our culinary team. So the calendars have new innovation across the board. I mean if you -- today, if you see -- if you're driving down Sheikh Zayed, you will see what Hardee's is doing, right, with the Frisco Burgers and a Toast, right, the Philly steak. And KFC is launching a new product, I think, in the next couple of days as well. And I've reviewed all the calendars, so I can comment that it's -- that is one of the key focus areas. In the end, it's about value and capability is what drives customers to our restaurants. I'll give you another example. We are testing doughnuts with ice cream at Krispy Kreme. We have introduced really good food menu at Peet's Coffee. So if anyone is in UAE, please go try it out. So I can talk a lot about culinary and product innovation.

[Operator Instructions] We have a question from Bobur Ergashev from Morgan Stanley.

I have just 2 questions, please. On home delivery, and forgive me if I hadn't heard it before, what's the guidance for the level for the rest of the year? Is 46% kind of the peak for the year, would you say? And my second question is on cost of inventory. Within that, what commodities are you seeing that are giving you kind of tailwinds in terms of cost of inventory being better year-on-year in Q1?

So Bobur, on home delivery, the -- I would say, if you look at from Q1 of last year to Q4 of last year, the share increased by 4-odd percent from 41% to 45%. We do believe that acceleration of increased share should go down. Having said that, it is difficult at the moment to guide on the exact percentage because we are very focused on recovery, and that's why we are sort of going on all channels aggressively to recover to pre-boycott levels of 2023. But it would be probably in a quarter or 2, we'll be better placed to see or comment on where the overall share is heading to. I mean, during COVID, if you look at, the share went up very aggressively, but then it also came back once everything was open. Now not sure whether the same pattern will reflect, but it needs to be seen over the next few quarters. On your second question on commodities, I would say there are commodities like protein, which are largely stable compared to Q4 of last year. So while we will have carryover benefit coming in because it sort of decelerated quarter-on-quarter, but we are not seeing any increase. There are some other categories, which includes sunflower oil, packaging, which have gone down, which is helping us in terms of tailwinds. So beef is slightly higher than where we were. But net-net, we expect to be better on a full year basis.

Looks like we have a follow-up question from Rishik (sic) [ Nishit ] Lakhotia from SICO.

Just a follow-up on the Oman business. When do we expect that to be profitable? And how do you intend to turn it around? Any guidance on that? And plus, in terms of expansion in Iraq, is the business already profitable there? Or if you can just give us more color on what's happening in Iraq given that, that will be a focus geography as well for this year. So that's my first question. And secondly, I mean, just a comment that there are so many analysts here who are a bit disappointed with the disclosures falling and also the fact that you had a one-off last year first quarter, which you're disclosing this year about the last year first quarter. It doesn't really look good. I mean it should have been disclosed in the same quarter. So I mean, just more every one-off to be disclosed in the same quarter than the next year, if it's a positive.

No, Nishit, in fact, even in Q1 of last year, we did disclose very much the release we have got from the franchises, and that was mentioned in our -- in the earnings call. Now it is difficult to comment how long the release would have lasted, but it was very much mentioned in the earnings call. On your point on disclosures, we just removed the line chart because we want -- we have shared our like-for-like performance versus '23 and versus '24. Given we were double-digit positive, there was nothing incremental value coming in from that. And we have noted the point like-for-like by brand and on net income to EBITDA, which we said, as I mentioned earlier, that we would put it as an annex slides on the website in the next year or so. And Amar, you will take on if you want.

Yes, sure, Harsh. And Nishit, be assured there's no intention to be less transparent, okay? So we just -- what we showed this time in terms of sales, we felt it was a lot more relevant than a line chart without any numbers. So having said that on Pizza Hut Oman, again, we acquired the business in January. We're already seeing improvement on the sales just in the last couple of months. And our plans focus on value, our plans focus on product innovation, introduction of technology, running great operations. So it's a yellow brick road that we follow with the other brands and other countries wherever the business is under stress. And because we started the KFC recovery last year, that is -- we're looking -- the numbers are looking quite good with KFC Oman in terms of the recovery. And we have no doubt that Pizza Hut will follow suit as well. And please repeat your question on Iraq again.

Yes. So thank you for taking the feedback. And just on the Iraq, I just wanted to understand what's your -- I mean, currently, is the operations profitable? And what level of expansion or so should we expect in Iraq in the coming year given that that's one of the geographies you're positive and excited about in terms of expansion this year?

Yes. So Iraq business is profitable. In fact, one of the more profitable countries. So we have KFC there and Hardee's and Pizza Hut, and we have a good pipeline in Iraq. So -- and we will continue to build that. Now having said that, we are also [indiscernible] because in a way, from time to time, Iraq, there are security challenges, et cetera. So we are cautiously optimistic. We haven't opened up the floodgates for expansion in Iraq. So we are being very careful with site selection, where we go, what areas. We're also taking into account the safety and security of our employees and staff as well. But overall, good progress in Iraq.

We have a question from Abdulla [indiscernible] from SAB Invest.

Yes. Maybe -- sorry, maybe I missed this. Could you please provide some color on the performance by brands overall and specifically in Saudi?

So as we said at the level, we will provide the exact like-for-like in the next year, but Hardee's has been performing very well, followed by Pizza Hut and KFC. On the Krispy Kreme front, we still continue to face some headwinds on the like-for-like for Krispy Kreme, but Hardee's has been very strong, followed by KFC and Hardee's. Specifically to Saudi, Saudi, in line with UAE had less impact of boycott. So the like-for-like decline in '24 versus '23 was not that high. We still have positive like-for-like, but it is lower than some of the other markets like UAE and Kuwait for sure.

Okay. We -- looks like we have a follow-up from Bobur from Morgan Stanley.

Just a quick follow-up on the like-for-like. So you provided it basically adjusted for calendar adjusted for Ramadan. Would you mind providing like-for-like non-adjusted, just to plain one for the group, please, for the quarter?

So Bobur, when you mean non-adjusted means with different days of Ramadan compared to quarter-on-quarter.

And there is 2 terms. 0.2% higher right?

So if you look at the like-for-like sales, it was 13.9%. It was probably 0.5% lower. So it would be 13.2%, 13.3% compared to -- if you adjust for Ramadan. So still a very strong like-for-like performance despite the movement of Ramadan.

So 0.5 percentage basically headwind?

Correct, yes, going into the next quarter.

Yes, there's a 10-day [indiscernible] Ramadan versus 2024.

Looks like we have a follow-up from [ Avinash Singh ] from ABI.

Yes. I just wanted to ask regarding how much sales the company has generated from Oman acquisition of Pizza Hut?

Avinash, we have not disclosed the exact sales from Pizza Hut Oman. But as Amar said, any acquisition happened it was closed in late January. So it's a bit premature, but we continue to focus on building the momentum for the business. And also in line with the KFC performance in Oman and will continue in the right [indiscernible]

And how does it compare with the overall Pizza Hut sales across the other countries? Is it very low? Or is it comparing in line with the other countries?

See, as I mentioned earlier, Avinash, Oman was one of the worst hit countries because of the geopolitics of American brand. However, on the KFC side, we are seeing strong recovery. So currently, it is in line with some of the other countries. UAE is the highest, but I would say it's in line with, for example, Bahrain, Egypt, et cetera. But we want to get it back to the precrisis levels. That's the plan.

Thank you very much. With this, we would like to thank everyone's participation today. We will now be closing on the lines. Thank you, and have a nice day.

So Louis, don't close the line yet.

Apologies.

Yes, yes. So I just wanted to acknowledge, I know a lot of folks mentioned on the like-for-like for the Power Brands. And again, I want to assure everybody that was not intentional. We want to acknowledge that was a miss on our part, and we will make sure we upload that information. Thanks, everybody.

We will now close the lines. Thank you.