Restaurant Brands lifts 4Q revenue bolstered by KFC sales in NZ, Australia

Thursday 9th March 2017

Restaurant Brands New Zealand, the fast-food retailer, lifted fourth quarter sales 37 percent to $121.6 million, bolstered by gains from its Australian KFC stores.

In the 12 weeks to Feb. 27, the company's sales rose to $121.6 million, up $32.7 million from the equivalent period a year earlier. Some $27 million of that came from the 42 KFC stores in New South Wales Restaurant Brands bought in April 2016. The company's New Zealand sales rose 6.4 percent to $94.5 million in the fourth quarter, while same-store sales, which are those for outlets open at least 12 months, increased 6 percent to $91.2 million.

The quarterly gain lifted annual sales 28 percent to $497.2 million.

Yesterday, Restaurant Brands announced plans to split its corporate structure into three geographical divisions of New Zealand, Australia and Hawaii, as it awaits settlement on its acquisition of Pacific Island Restaurants, the largest fast-food operator in the US state with 82 Taco Bell and Pizza Hut stores.

In New Zealand, KFC sales rose 9 percent in the fourth quarter to $70.7 million, with a 4.9 percent gain on an annual basis for sales of $296.5 million. Same-store sales rose 7.1 percent in the quarter, with 92 stores open, one more than a year ago.

Pizza Hut sales dropped 9.2 percent to $9 million in the fourth quarter, for an annual fall of 9.8 percent to $40.4 million. The company has four fewer Pizza Hut stores compared to the same time last year, and sold its Invercargill store to an independent franchisee in the quarter, reducing its total outlets to 35. Franchisees now own 58 of the 93 stores in the Pizza Hut network.

Starbucks Coffee sales dropped 1.6 percent to $6.6 million, for an annual decline of 0.4 percent to $26.7 million, although they gained on a same-store basis. It now has 24 stores trading, one fewer than a year prior after it closed Aotea Square.

Hamburger chain Carl's Jr, the company's newest brand, recorded an 11 percent quarterly gain in sales to $8.2 million for an annual gain of 9 percent to $36.3 million. Restaurant Brands closed the underperforming Otahuhu store in the quarter, leaving it with 19 restaurants, but a net gain of one store for the year as it opened two more throughout 2016.

The shares last traded at $5.42, up 0.6 percent in early trading, and have gained 19 percent in the past year.

BusinessDesk.co.nz

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