TORONTO: MTY Food Group Inc. (TSX: MTY) on Friday reported higher quarterly profit, buoyed by strength in its Canadian operations which helped offset macroeconomic softness in the United States.
Net income attributable to owners rose to C$57.3 million, or C$2.49 per diluted share, for the second quarter ended May 31, from C$27.3 million, or C$1.13 per share, a year earlier.
Revenue in the franchise segment increased 3% to C$54.0 million, driven by organic system sales growth in Canada and favorable currency exchange, while system sales edged up to C$1.5 billion.
CEO Eric Lefebvre said Canadian casual dining saw strong momentum, while U.S. performance was pressured by lower traffic and average check. “We believe these are near-term challenges and remain confident in our recovery strategy,” Lefebvre said.
Adjusted EBITDA fell 5% to C$70.0 million, mainly due to weakness in the Corporate segment where performance was impacted by two large U.S.-based banners. EBITDA margin in the segment narrowed to 9% from 13% last year.
The company ended the quarter with 7,046 locations, down one from the prior quarter.
MTY declared a quarterly dividend of 33 Canadian cents per share, payable on Aug. 15 to shareholders of record at the close of business on Aug. 5.
The company said its store pipeline remains healthy, with stronger net openings expected in the coming quarters. MTY expects stable EBITDA margins across segments this year and reiterated its focus on free cash flow generation and cost efficiencies.
Shares repurchased during the quarter totaled 297,000 for C$12.6 million, bringing the year-to-date total to 584,400 shares.