Expansion strategy pays off for Restaurant Brands

Russel Creedy.
Russel Creedy.
Restaurant Brands showed the benefits of its expansion and acquisitions strategy by reporting a 41% increase  in its second-quarter profit for the 16 weeks ending September 11.

Total sales for the quarter were $224.9million, an increase of $65.4million on the previous corresponding period.

New Zealand operations generated sales of $130.6million, up 5.3%, with an additional $42.2million from the 47 KFC outlets in Australia and $52.1million from the 37 Taco Bell and 45 Pizza Hut outlets in Hawaii, Guam and Saipan.

Group same store sales for the quarter were up 6.7%. New Zealand operations rose 6.1% and Australia was up 8.9%.

Year to date sales were $386.1million, an increase of 51% on the pcp and up 6.8% on a same store basis.

Total company store numbers were up by 82 on the equivalent period last year to 297, primarily from the 82-store Hawaiian acquisition.

In New Zealand, KFC continued to be the biggest earner.

In a note to the NZX, Restaurant Brands chief executive Russel Creedy said second-quarter sales for KFC New Zealand were $99.4million, an increase of 8%.

Year to date sales for KFC NZ were $170.3million, an increase of 8.2% on a total basis and up 7% on a same-store basis.

Store numbers remained steady at 92 during the quarter, up one on the previous year, he said.

Total second-quarter sales for Restaurant Brands-owned Pizza Hut stores were $13.2million, an increase of 2.9% on the pcp, despite having three fewer stores because of sales to independent franchisees. Same-store sales for the quarter increased 10.1%.

Starbucks coffee had a 6.4% increase in sales in the quarter to $7.3million, following the closure of the Botany store. Same-store sales were up 3.9%.

Carl’s Jnr sales were also down on the pcp, due to a strong sales period last year following two openings in Christchurch and the closure of the poor-performing Otahuhu store at the end of last year. Total sales for the quarter were down $10.7million, or 6.1%.

The financial results for the first half of the year would be released on October 19, Mr Creedy said.

Craigs Investment Partners broker Chris Timms said the expansion activity by Restaurant Brands was helping sales but it was difficult to know how that had translated to profit until the results were released.

"The good sign is the increased sales has added to the top line ... Restaurant Brands is not exactly a cheap option. They are obviously doing something well. There is lots of competition, particularly for Pizza Hut, where every man and their dog has a pizza store."

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