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Restaurant Brands lifts 2Q sales; appetite for KFC offsets ditched Starbucks

Thursday 19th September 2019

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Restaurant Brands New Zealand lifted second-quarter sales 3.5 percent as growing demand for the fast-food operator's local KFC chain more than offset the loss of its lacklustre Starbucks Coffee stores. 

Total sales rose to $259.7 million in the 16 weeks ended Sept. 9 from $251 million a year earlier. Its New Zealand arm still accounts for more than half its revenue, largely through the success of 97 KFC stores. 

The local KFC arm lifted sales 8.8 percent, or $9.2 million, to $113.5 million, more than making up for the retailer's exit from Starbucks, which contributed $7.3 million to revenue in the same period a year earlier. Its local Pizza Hut franchise posted a 5.9 percent drop in sales to $10.6 million, and its Carl's Jr chain lifted revenue 8.3 percent to $10.7 million, helped in part by the introduction of UberEats. 

Second-quarter sales from its 61 KFC stores in Australia rose 2.4 percent to $62 million, including a weaker Australian dollar crimping returns in New Zealand dollar terms. Its Hawaiian Taco Bell and Pizza Hut stores lifted sales 9.2 percent to $62.9 million, buoyed by a stronger greenback. 

The fast-food operator is targeting profit growth of 6 percent in the current financial year, a period that will see it open the first Taco Bell stores across Australia and New Zealand. It reported underlying annual profit of $42.2 million in the year ended Feb. 25.

Restaurant Brands will report its first-half result on Oct. 16. 

First-half sales were up 2.7 percent at $442.6 million, of which 44 percent came from its New Zealand KFC stores. The exit from Starbucks last year meant the company had 285 stores at the end of the period, down from 305 a year earlier. 

The shares last traded at $11.02, hitting an all-time high at $11.04 yesterday. Mexico's Finaccess Capital took control of the company in a partial takeover last year, paying $9.45 a share for 75 percent of the stock. 


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