Restaurant Brands' sales rise

Wednesday 3rd June 2009

Restaurant Brands NZ, which operates the KFC, Pizza Hut and Starbucks Coffee franchises in New Zealand, posted a 4.3% gain in quarterly sales as pizza sales growth returned for the first time in four years.

Sales climbed to $72.8 million in the 12 weeks ended May 25, the fast-food company said in a statement. Same-store sales rose 6.5%, though revenue at Starbucks dipped.

Pizza Hut halted 15 consecutive quarters of declining sales on a same-store basis, with the company attributing the turnaround to new products, operational improvements and marketing efforts. It competes with chains including Dominos and Hell Pizza, which have been engaged in so-called pizza wars, offering ever cheaper deals to bolster market share.

Shares of Restaurant Brands were unchanged at 95 cents and have climbed 58% in the past six months. The stock is rated ‘outperform’ by three analysts who follow the company, according to Reuters.

Some analysts say the company has benefited from the recession as more consumers ‘trade down’ to cheaper takeaway meals instead of eating at restaurants.

“The current economic environment has not adversely impacted on the continued overall positive sales growth for the company,” it said. Sales growth “was again led by the KFC brand and was further assisted by the effect of a combined Easter/School Holiday trading period compared to the prior year.”

KFC sales rose 6.5% to a record $50 million the latest quarter while sales at Pizza Hut climbed 2.4% to $15.5 million.

Starbucks Coffee sales fell 2.3% to $7.3 million amid a “softening in demand across both coffee and food lines, not seen since late 2004.”

“The loss in sales is seen as temporary with some changes to the management of the business, with a review of pricing, product mix and customer offer underway to address this change in demand whilst still maintaining margins,” the company said.

Businesswire.co.nz

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