Shares: MTY Food Group shares traded 4.3% higher at 64.00 Canadian dollars ($48.19) this morning after the company announced better-than-expected earnings and revenue results for its fiscal second quarter. The positive performance can be attributed to the successful integration of recent acquisitions.
Strong Financial Results
MTY Food Group, a Canadian franchiser and operator of casual dining and quick-service restaurants, reported a higher net income of C$30.4 million, or C$1.24 per share, for the period ending May 31. This represents an increase from C$28.6 million or C$1.17 per share in the same period last year. Analysts on FactSet had predicted a decline in income, estimating per-share earnings of C$0.99.
In addition, the company saw a significant growth in revenue, which rose 88% to C$305.2 million from C$162.5 million in the previous year’s quarter. The increase exceeded analysts’ expectations of C$282 million.
Successful Integration of Acquisitions
MTY Food Group’s CEO, Eric Lefebvre, emphasized that the strong growth in earnings and revenue reflects the successful integration of recent acquisitions in the U.S. These acquisitions include BBQ Holdings in Q4 of 2022, as well as Wetzel’s Pretzels and Sauce Pizza and Wine in Q1 of 2023. Lefebvre stated that these acquisitions have transformed MTY into a truly diversified North American franchising company.
Impressive Performance in System Sales and Same-Store Sales
MTY Food Group achieved significant growth in system sales, reaching a company record high of C$1.47 billion, a 39% increase compared to the previous year. This includes sales from all restaurants, both company-owned and franchised. Furthermore, same-store sales demonstrated a positive trend, rising by 5% year-over-year.
Expansion and Consolidation
During the quarter, MTY Food Group expanded its network, opening 73 locations. However, the company also closed 77 locations. Despite this, at the end of the period, MTY operated a total of 7,124 locations.
Overall, MTY Food Group’s strong financial results and successful integration of acquisitions position the company for continued growth and success in the North American franchising market.