Restaurant Brands lifts first quarter sales 8.5%, bolstered by Australian KFC stores

Thursday 2nd June 2016

Restaurant Brands New Zealand lifted first-quarter sales 8.5 percent as the acquisition of New South Wales' biggest KFC franchise bolstered revenue in the period.

Total sales rose to $96.6 million in the 12 weeks ended May 23 from $89.1 million a year earlier, of which the 42 Australian KFC stores contributed $8.1 million, the Auckland-based company said in a statement. Stripping that out, revenue in New Zealand was down 0.6 percent due to the closure of nine Pizza Hut stores, one Starbucks Coffee outlet and weak sales in the Carl's Jr chain.

On a same-store basis, sales rose 0.4 percent with gains in Restaurant Brands' KFC, Pizza Hut and Starbucks franchises offsetting a 14 percent drop in revenue at Carl's Jr, which enjoyed rapid growth since it joined the group in 2014.

Restaurant Brands carried out a major expansion in March, making its first foray across the Tasman by buying QSR Pty, the biggest KFC franchisee in NSW, with 42 stores, for A$82.4 million in cash and scrip. Its shares have soared on the prospects of Australian earnings growth from KFC, its most successful New Zealand brand.

The company's shares last traded at $5.50 and have climbed 25 percent so far this year. The stock is rated a 'buy' based on four analyst recommendations compiled by Reuters, with a median price target of $5.63.

BusinessDesk.co.nz

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