Restaurant Brands first quarter sales gain, led by Carl's Jr chain
Restaurant Brands [NZX: RBD], which operates KFC, Pizza Hut and Starbucks Coffee, said first quarter sales grew 5.9 percent as burger sales from its latest addition to New Zealand's fast food scene, Carl's Jr, climbed 60 percent.
Total store sales rose to $77.7 million in the three months ended May 19 from $73.3 million in the same period a year earlier, the Auckland-based company said in a statement. Same store sales rose 4.3 percent to $74.3 million.
Restaurant Brands is tweaking its store mix in an effort to boost earnings. The company is selling its regional and lower volume Pizza Hut stores to independent franchisees, has closed unprofitable Starbucks Coffee outlets and added burger chain Carl’s Jr. to better compete with rivals McDonald’s Restaurants (NZ) and Burger King Corp. In the coming year it plans to pick up the pace of store upgrades at its main KFC fried chicken chain, as it targets a complete revamp of the network in the next two years.
Sales at the Carl's Jr outlets, which Restaurant Brands brought to New Zealand at the start of 2012, rose to $3.7 million from $2.3 million, while same store sales fell 36 percent to $1.5 million reflecting a strong opening from the previous year, the company said. The chain didn't open any new stores in the quarter, but has doubled the number of stores to eight in the intervening months.
Sales at its biggest earner, KFC, rose 5.3 percent to $55.9 million, while same store sales lifted 5 percent to $55.8 million on the launch of its new menu and the promotion of its Kiwi Onion Dip Burger. The chain added one new store in the quarter, taking the total number of outlets to 91 outlets across New Zealand.
Pizza Hut sales increased 0.3 percent to $11.3 million, while same store sales rose 9.3 percent to $11.3 million. Restaurant Brands has sold seven shopfronts in the intervening months, including selling its Newtown shop in Wellington during the quarter.
Starbucks sales rose 2.2 percent to $5.7 million, while same store sales were up 5.5 percent to $5.7 million compared to the same period a year earlier. No further cafes were closed in the quarter, but two have been closed in the year.
Restaurant Brands has 176 fast food outlets throughout New Zealand.
The shares rose 0.6 percent to $3.20 and have gained 5.6 percent in the past year. The stock is rated an average 'buy' according to three analyst recommendations compiled by Reuters with a median target price of $3.40.