MTY Food Group Q2 Earnings Call Highlights

MTY Food Group’s second-quarter results weakened as softer consumer traffic, inflation in food costs and lower corporate-store performance pushed adjusted EBITDA down to CAD 60.2 million and net income to CAD 15.4 million, well below last year. The company plans to close 68 underperforming corporate-owned restaurants after a portfolio review, including about 45 to 50 Papa Murphy’s locations. MTY expects CAD 10 million to CAD 12 million in closure-related costs, but says the move should improve the quality and profitability of its store base. Despite the earnings pressure, MTY said cash flow improved and net debt fell to about CAD 531 million. Management also expects development activity to accelerate later in the year, with Cold Stone Creamery and Wetzel’s Pretzels highlighted as key growth brands. MTY Food Group TSE: MTY reported lower second-quarter earnings as softer consumer traffic, inflation in key food categories and weaker corporate-store performance weighed on results, while management outlined plans to close 68 underperforming corporate-owned restaurants following a detailed portfolio review. Chief Executive Officer Eric Lefebvre said the quarter was “a challenging period,” citing continued consumer confidence issues, particularly in the company’s corporate location segment. Same-store sales improved sequentially from the prior quarter but remained negative, with traffic pressure identified as the main factor behind the decline. Same-store sales fell 2.2% in the U.S. and 1.8% in Canada, a narrower gap than in prior periods. Lefebvre said sales trends in Canada improved in June, with a majority of concepts posting positive same-store sales during the month. In the U.S., he said trends remained similar t...