Restaurant Brands lifts 3Q sales by 35% on demand for KFC in Australia, NZ

Thursday 15th December 2016

Restaurant Brands New Zealand, the fast-food retailer, lifted sales 35 percent in the third quarter, with most of the increase coming from the 42 Australian KFC stores the company bought in April.

Sales in the 12 weeks ended Dec. 5 rose to $119 million, from $88.7 million in the same period a year earlier, the Auckland-based company said. Same-store sales, which are those for outlets open at least 12 months, rose 4 percent to $90 million.

The company made its first foray across the Tasman with the acquisition of the biggest KFC franchisee in New South Wales for A$82.4 million made up of A$62 million in cash and 5 million shares, which gave vendor Copulos Group almost 5 percent of the company with a 12-month escrow on trading the stock.

Restaurant Brands is expanding into new markets to spread its risk and drive future earnings growth. Last month it raised $94 million through a sale of shares to investors, helping fund its planned purchase of Pacific Island Restaurants, the largest fast-food operator in Hawaii with 82 Taco Bell and Pizza Hut stores.

Total sales for KFC Australia were $26.5 million, and the acquired stores have contributed $70.1 million this year. KFC New Zealand sales rose 6 percent to $68.3 million, with one new store opening in Rolleston bringing the total number of KFC outlets in the country to 92. Same-store sales for KFC rose 4.2 percent to $66.7 million.

Pizza Hut total sales dropped 9.1 percent to $9.5 million, as the company sold its Grey Lynn store to an independent franchisee, reducing its total outlets to 36. Franchisees now own 56 of the 92 stores in the Pizza Hut network.

Starbucks Coffee sales rose 1.8 percent to $6.4 million, one fewer store at 24 after it closed Aotea Square. Same-store sales gained 5.6 percent. Hamburger chain Carl's Jr, the company's newest brand, recorded a 16.1 percent gain in sales to $8.8 million as the number of stores rose by two from the year earlier to 20. Same-store sales rose 3.5 percent, the brand's first positive quarter.

The shares last traded at $5.11 and have gained 18 percent this year.

BusinessDesk.co.nz

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