Westlife Foodworld Ltd. share price target

We see Westlife to benefit from its continued focus on innovation and improving customer experience in anticipation of an eventual uptick in consumer sentiment. We estimate 17% sales growth over FY17-22E on high-single digit SSSg.

Q1 sales grew 14% YoY with SSSg at 8.7% the highest in past four years. Gross margin was stable at 60.1%, but EBITDA margin improved 90 bps YoY at 5.6%, as higher staff costs (up 90 bps YoY) were more than offset by operational efficiencies (increasing restaurants under ROP2.0 platform)

Q4 sales grew 7.5% YoY.SSSg grew modest 1% YoY on lower footfalls at high street and mallsdue to an early end to EoSS. Gross margin improved 40bps YoY to 61.3% but EBITDA margin declined 60bps YoY on higher staff costs (up 140bps YoY).