United Foodbrands Navigates Q2 FY26 with Strategic Focus on Growth

United Foodbrands Limited, the dynamic force behind popular restaurant chains like Barbeque Nation and Toscano, has released its financial results for Q2 FY26, painting a picture of cautious optimism amidst a challenging consumption environment. While the industry continues to grapple with subdued demand, the company is demonstrating resilience through strategic initiatives aimed at driving volume growth and network expansion. For the quarter ended September 30, 2025, United Foodbrands reported consolidated revenue from operations of INR 304.8 crore, a modest 2.6% sequential increase over Q1 FY26, but a slight 0.3% year-on-year decline. Operating EBITDA stood at INR 37.7 crore, with a margin of 12.4%, though adjusted operating EBITDA, excluding IND AS 116 impact and non-cash ESOP provisions, was INR 3.3 crore, reflecting temporary pressures.

The company's performance was marked by a significant turnaround in Same-Store Sales Growth (SSSG). Excluding the 9 days of Navratri, Q2 FY26 SSSG was a positive 0.8%. For the four-month period from July to October 2025, SSSG stood at +0.3%, driven entirely by transaction growth. This uptick signals a potential shift in momentum after several quarters of sluggish or negative SSSG. The dine-in business grew 1.6% quarter-on-quarter, with same-store volume growth of approximately 2% over the four-month period. The delivery business also showed strong traction, growing 7.0% quarter-on-quarter and recording a 12% increase in same-store transactions over the same four-month period. These figures underscore the effectiveness of recent initiatives to enhance guest experience and drive footfalls.

Segmental Performance and Strategic Levers

United Foodbrands operates across distinct segments: Barbeque Nation India, Barbeque Nation International, and Premium CDR (Casual Dining Restaurants). The Barbeque Nation India business reported revenue of INR 230 crore for Q2 FY26. While this segment's SSSG was (1.1)% excluding Navratri, management highlighted a 3.7% transaction growth over the four-month period, indicating that value-led campaigns are successfully attracting customers. The international operations, particularly Barbeque Nation International, continued to be a strong performer, recording a 27% year-on-year revenue growth to INR 27.6 crore, supported by an 8.4% SSSG and robust operating margins of around 18%. The successful opening of its first restaurant in Riyadh, Saudi Arabia, further strengthens its presence in the Middle East.

The Premium CDR segment, which includes brands like Toscano and Salt, also delivered a robust performance with INR 47.3 crore in revenue, marking a 17% year-on-year growth. This segment maintained a healthy operating margin of 13%, with mature restaurants delivering over 20% margins. The company added two new Premium CDR restaurants in Hyderabad during the quarter, aligning with its target for 30% network growth in this segment for FY26. The focus remains on scaling these high-potential brands in new metro markets through continuous culinary and service innovations.

Outlook and Capital Allocation

Looking ahead, United Foodbrands is committed to its network expansion strategy, aiming for 300+ restaurants by FY27 and 400+ by FY30. The company added 6 net restaurants in Q2 FY26, bringing the total to 241, and is on track to add 35 new restaurants in FY26. This expansion is supported by a planned CAPEX of approximately INR 125 crore for the financial year. While gross margins moderated in Q2 due to culinary initiatives and increased marketing spend, management expects them to stabilize between 67-68% going forward. The company's disciplined cost control, including a 6% reduction in overhead costs within the Barbeque Nation India business, is expected to contribute to improved profitability.

Despite the current challenges, management maintains a long-term view, emphasizing investment in guest experience, culinary innovations, and value offerings to build a stronger business. The return to positive SSSG, strong performance in international and Premium CDR segments, and a clear expansion roadmap underscore the company's strategic clarity and execution focus. United Foodbrands is navigating the dynamic restaurant landscape with a blend of aggressive growth plans and disciplined operational management, aiming for sustained volume growth and enhanced shareholder value in the coming quarters.