MTY Food Group has reported a net income of $16.4m for the fourth quarter (Q4) of 2023, a surge of 131% compared to $7.1m in the same period of the previous year.
The company attributed the surge in profit to a combination of higher normalised adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) and reduced income taxes.
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The company’s revenue for the quarter ending 30 November 2023 grew by 16% year-on-year to $280m.
MTY Food Group credited this increase to the strategic acquisitions of BBQ Holdings, Wetzel’s Pretzels and Sauce Pizza and Wine, which contributed to a 50% and 18% growth in corporate restaurants and franchise operations respectively in the US and international segments.
Despite overall revenue growth, MTY Food Group posted a 1% decline in franchise operations revenue in Canada, but normalised adjusted EBITDA, excluding acquisition-related expenses, improved by 13% year-on-year to $60.4m.
System sales saw an 11% increase year-on-year, reaching $1.3bn in the fourth quarter, with the US market as the largest contributor with an 18% improvement.
However, MTY noted that excluding the impact of acquisitions, system sales experienced a 2% decline.
The company reported a slight decrease in same-store sales, with a 0.9% drop in Q4 2023.
While quick-service restaurant brands maintained strong performance, fast casual and casual dining brands faced challenges, leading to negative same-store sales.
By the close of Q4 2023, MTY’s network had 7,116 locations: 6,897 franchised or under operator agreements and 219 corporate-owned.
MTY CEO Eric Lefebvre said: “In the fourth quarter of 2023, we continued generating strong profitability and cash flows although same-store sales dropped 0.9% year-on-year as consumers reined in discretionary spending, affecting certain segments of our portfolio.
“The comparable store decline came mainly from brands commanding a higher price point, while our fundamental quick-service restaurant business remained solid in Canada and the US. I am also pleased to report we opened the most locations in the company’s history in the fourth quarter of 2023, bringing us within a few stores of breaking even versus closures for a third consecutive reporting period.
“On the operating efficiency side, we plan to consolidate business units and implement cost-control measures in 2024 to maximise synergies across the entire organisation, now that our latest acquisitions are fully integrated within MTY’s operations.”
