Restaurant Brands 3rd-qtr sales rise 4.7% as Australia, Hawaii grow

Thursday 13th December 2018

Restaurant Brands New Zealand, subject to a partial takeover bid by Mexico's Finaccess Capital, said its third-quarter sales rose 4.7 percent as its overseas operations continued to grow.

Total sales in the 12 weeks to Dec. 3 were $181.5 million, versus $173.3 million a year earlier, the fast-food operator said. The company, which operates the KFC, Pizza Hut, Starbucks Coffee and Carl's Jr brands in New Zealand also operates KFC in Australia and Taco Bell and Pizza Hut in Hawaii.

New Zealand operations generated sales of $94.7 million, down 2.2 percent in total but up 2.2 percent on a same-store basis. KFC New Zealand continues to fare well, with third-quarter sales up 4.1 percent on a same-store basis. Store numbers remained steady at 94 during the quarter, and one higher than a year earlier.

Pizza Hut, however, saw a 6.1 percent decline in same-store sales. Restaurant Brands-owned store numbers were steady through the quarter and down by five from last year at 29 as five stores were sold to independent franchisees.

Total sales at Starbucks Coffee fell more than 50 percent due to the sale of 22 stores in the quarter. Same-store sales, however, were up 5 percent. Restaurant Brands sold its New Zealand Starbucks franchise in the quarter.

At Carl's Jr, same-store sales were down 8.3 percent. Store numbers remained steady at 18.

Restaurant Brands this week said it will build more than 60 Taco Bell restaurants in New Zealand and New South Wales between 2019 and 2024. It expects to fund the building of the stores from internally generated cash flows. It doesn't expect the brand to make a significant contribution to earnings for several years.

Australian KFC outlets produced sales of $44.3 million, up 18.8 percent on a total basis and up 2.4 percent in Australian dollars on a same-store basis. Australian store numbers increased by one to 62 during the quarter and total store numbers are three higher than last year.

Hawaiian operations generated sales of $42.5 million, up 8.5 percent on a total basis and 3.6 percent in US dollars on a same-store basis. Taco Bell stores remained steady at 36 during the quarter, and down one versus last year. Pizza Hut Hawaii sales were steady at 45 during the quarter.

The stock last traded at $8.47, up 11.1 percent since this week's $9.45 per share offer from Finaccess Capital for 75 percent of the company.

Restaurant Brands' independent directors have elected to accept the offer and the board unanimously recommends shareholders do likewise, unless a better offer emerges.

The Mexican firm's offer closes on March 12, and acceptances above 75 percent may be scaled depending on the uptake.

Finaccess has committed to support Restaurant Brands' existing strategy in the near-term to pursue international growth.

(BusinessDesk)

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