Fast-food company’s profit falls
The fast-food company that owns the local franchises for KFC, Pizza Hut, Taco Bell and Carl’s Jr reported a weaker first-half profit as it faced higher inflation.
Restaurant Brands profit slumped 56% to $15.3 million in the six months to the end of June, in line with its forecast last month for profit of $14m to $16m. The previous year included an $11.4m benefit from a United States Covid-19 subsidy scheme.
Revenue rose 8.6% to $611.9m. As inflation rages around the world, fast-food companies are coming under pressure – their costs are rising but they are struggling to pass that on to customers as the growing cost of living prompts them to spend less.
‘‘The company continues to face cost inflation pressures across all markets but is mitigating the impact of these by implementing cost savings and taking price increases where possible,’’ the directors said.
‘‘However the extent of cost inflation has meant that the opportunity to pass input costs on in the short term has been limited, with consequent short-term adverse profit impacts.’’
Restaurant Brands continued to face challenges from Covid-19, with staff shortages hampering operations across all divisions and in some cases forcing reduced operating hours, the directors said. In New Zealand, operating profit fell 21% to $22.7m even as sales increased 5.2% to $251.8m.
‘‘Staff shortages remain an ongoing issue with high numbers of unfilled vacancies.’’ The company’s New Zealand profit margin fell to 16.1% from 18%, as it faced increased costs and invested to grow its newer Taco Bell chain.
While the restricted availability of building materials and store equipment had slowed store development, new store builds continued with one KFC outlet in Whangārei and one Taco Bell outlet at Cuba Mall in Wellington opened during the first-half, the directors said.