MTY Food Group Beats Estimates Despite Soft U.S. Sales

MTY Food Group reported a significant turnaround in its fourth quarter, posting net income of C$32.1 million, or C$1.40 per share. This result, for the period ending Nov. 30, stands in sharp contrast to the C$55.3 million loss recorded during the same period last year. The company attributed the improvement primarily to a sharp reduction in impairment losses.

The results comfortably cleared the bar set by Wall Street. According to FactSet data, analysts expected earnings of C$0.86 per share on revenue of C$282.2 million. Instead, MTY delivered C$305.4 million in revenue, driven by its U.S. franchise operations and its processing, distribution, and retail segments.

However, the headline growth masked underlying challenges in consumer demand. While total system sales rose to C$1.41 billion, the company noted the figures were inflated by an extra week of sales and foreign exchange tailwinds. On an organic basis, excluding those factors, system sales fell by 2% as international and U.S. markets struggled.

Regional Sales and Portfolio Expansion

The downturn was most visible in the company’s core U.S. market, where same-store sales dropped 2.8%. International locations saw a steeper decline of 3.2%, while Canadian operations managed a slight increase. Despite the cooling sales, MTY continued to expand its footprint, ending the quarter with 7,080 locations across its global network.

The company’s diverse portfolio remains concentrated in high-traffic retail environments like mall food courts and suburban centers. Its major brands include:

• Cold Stone Creamery
• Papa Murphy’s
• Mr. Sub