Restaurant Brands 3rdquarter sales up 4.7% at $181.5m

RESTAURANT Brands New Zealand, which is subject to a partial takeover bid by Mexico’s Finaccess Capital, said its thirdquarter sales rose 4.7% as its overseas operations continued to grow.

Total sales in the 12 weeks to December 3 were $181.5 million, compared with $173.3 million a year earlier, the fastfood 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% in total but up 2.2% on a samestore basis. KFC New Zealand continues to fare well, with thirdquarter sales up 4.1% on a samestore basis. Store numbers remained steady at 94 during the quarter, and one higher than a year earlier.

Pizza Hut, however, experienced a 6.1% decline in samestore sales. Restaurant Brandsowned 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% because of the sale of 22 stores in the quarter. Samestore sales, however, were up 5%. Restaurant Brands sold its New Zealand Starbucks franchise in the quarter.

At Carl’s Jr, samestore sales were down 8.3%. Store numbers remained steady at 18.

Restaurant Brands this week said it would build more than 60 Taco Bell restaurants in New Zealand and New South Wales between 2019 and 2024. It expected to fund the building of the stores from internally generated cash flows. It did not 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% on a total basis and up 2.4% in Australian dollars on a samestore 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% on a total basis and 3.6% in US dollars on a samestore basis. Taco Bell stores remained steady at 36 during the quarter, and down one on last year. Pizza Hut Hawaii sales were steady at 45 during the quarter.

The stock last traded at $8.45, up about 11% since this week’s $9.45 per share offer from Finaccess Capital for 75% 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 will close on March 12, and acceptances above 75% 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