Restaurant Brands says fourth-quarter sales rise 19%

Wednesday 11th March 2015

Restaurant Brands, New Zealand's largest fast food store operator, increased fourth quarter sales by 19 percent as it benefited from an extra week's trading, a better performance from its KFC fried chicken unit and the addition of Carl's Jr. burger chain outlets.

Sales at the stores rose to $92.8 million in the 13 weeks ended March 2, from $77.6 million in the year earlier 12 week period, the Auckland based company said in a statement. Excluding the impact of the extra week, which is required to account for a leap year, sales rose 11 percent, the company said. That's up from sales growth of 6.4 percent a year earlier.

Restaurant Brands has been restructuring its stores to improve earnings. The retailer has sold regional and lower volume Pizza Hut stores to independent franchisees, closed unprofitable Starbucks Coffee outlets and added burger chain Carl’s Jr. to better compete with rivals McDonald’s Restaurants (NZ) and Burger King Corp.

In the latest period, Carl's Jr. sales more than doubled to $7.6 million, reflecting an additional 10 stores in operation over the period compared with the year earlier. The company had 18 Carl's Jr. stores at the end of the quarter, after opening a store in Manukau, acquiring seven previously independent Auckland stores and opening an additional store in Albany in the last week of the quarter.

The company's KFC chain, which accounts for almost three quarters of group sales, boosted revenue 18 percent to $67.2 million. Excluding the benefit of the extra week, sales rose 9.3 percent, ahead of the 5 percent gain a year earlier. Store numbers were steady at 91 during the quarter but up one on the prior period.

"The strong sales continue to be driven by the new menu (in particular around family meals), increased marketing spend and longer store opening hours," the company said. "Successful promotions in the quarter were the unique Moroccan Burger and the Festive Season Bucket campaign and promotions around the Cricket World Cup."

For the Pizza Hut chain, sales advanced 2.2 percent to $11 million as it traded with just 46 stores, five fewer than the year earlier period. On a same store sales basis, excluding the impact of changing store numbers and the extra week, sales rose 1.7 percent.

Restaurant Brands had 46 Pizza Hut company stores at the end of the quarter, with 42 stores now operated by independent franchisees.

The company's Starbucks Coffee chain increased sales 11 percent to $6.9 million even as it operated with 26 stores, one fewer than the year earlier period, as it benefited from a focus on better value and improved customer experience.

For the 53 weeks ended March 2, the company's sales rose 9.2 percent to $259.5 million. It will release full year earnings on April 16.

Shares in the company advanced 0.8 percent to $3.93, and have gained 6.3 percent so far this year.

BusinessDesk.co.nz

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