Restaurant Brands second-quarter sales jump on overseas expansion
Restaurant Brands New Zealand lifted second-quarter sales by 41% after the fast-food operator expanded through Australia and Hawaii.
The Auckland-based company said sales increased to $224.9 million in the 16 weeks ended September 11, from $159.5 million in the equivalent period a year earlier. New Zealand sales rose 5.3% to $130.6 million, while Australian sales jumped 19% to $42.2 million and its Hawaiian operations added $52.1 million. On a same-store basis, sales rose 6.7%.
New Zealand's largest fast-food operator is expanding into new overseas markets to drive future earnings growth. In April 2016 it expanded into KFC in Australia and in March 2017 bought the largest fast-food operator in Hawaii. Chief executive Russel Creedy told shareholders at the annual meeting in June that the company was now "truly international" and expected sales this financial year to exceed $700 million, up from $497.2 million last year. Today's release showed sales in the first half of the year were up 51% to $386.1 million.
In New Zealand, the company's 92 KFC stores lifted sales 8% in the second quarter to $99.4 million with the benefit of an additional store. Its 34 Pizza Hut stores increased sales 2.9% to $13.2 million despite having three fewer stores due to sales to independent franchisees which now own 60 Pizza Huts.
Sales at its 23 Starbucks Coffee stores dipped 6.4% $7.3 million after it closed its Botany store during the quarter, reducing the store numbers by two compared with the year-earlier period. On a same-store basis, Starbucks sales lifted 6.5%. Sales at the company's 19 Carl's Jr outlets fell 6.1% to $10.7 million due to strong sales in the year-earlier period following two new store openings in Christchurch and the closure of the poor performing Otahuhu store at the end of last year. On a same-store basis, Carl's Jr sales dipped 2.3%.
In Australia, the company acquired 42 KFC stores in New South Wales on April 27, 2016, and acquired another five independent KFC franchise stores in the first quarter of this year. The 47 stores contributed A$39.2 million in sales during the second quarter, up 16% from the year-earlier or 6.2% up on a same-store basis.
Its Hawaiian-based operations include 37 Taco Bell and 45 Pizza Hut stores in Hawaii, Guam and Saipan acquired on March 7, 2017, which contributed $US38.1 million in the second quarter. Of the 82 stores, the Taco Bell and Pizza Hut stores at Pearl Harbour are temporarily closed due to infrastructure work on the base and are scheduled to reopen in May 2018.
The company's shares advanced 0.5% to $6.37.