Restaurant Brands struggles as inflation evolves 

(Source: Taco Bell)

Trans-Tasman fast-food operator Restaurant Brands New Zealand’s performance continued to be impacted by rising inflationary environment during the six months ended June 30.

The group cited input cost increases in the New Zealand business – exceeding expectations – and lower than predicted sales growth in California and Hawaii, and higher interest rates. 

Total store sales were $589.4 million, up 9.4 per cent year over year, supported by the opening of new stores and a stronger US dollar.

The group recorded net profit after tax of $2 million compared with $14 million in last year’s first half, indicating inflationary pressures facing the group in all markets. 

Group store EBITDA was $72 million, down $6.5 million versus the prior year period, with cost inflation pressures offset by strong sales and improved performance of the Australian division.

By segment, Australia recorded the highest sales growth (13.8 per cent), followed by Hawaii (10.4 per cent), New Zealand (8.1 per cent) and California (5.2 per cent).

Australia’s same-store sales were up 9.7 per cent, largely driven by the strong performance of KFC. The business saw a significant recovery in CBD and mall margins despite inflationary headwinds.

Total stores increased from 488 to 493 for the period. In Australia, two new Taco Bell locations were opened in Bathurst and Cessnock.

Restaurant Brands operates the KFC, Pizza Hut, Taco Bell and Carl’s Jr chains in New Zealand, KFC and Taco Bell in Australia and California, and Taco Bell and Pizza Hut in Hawaii and Guam.

The group previously lowered its full-year guidance in its second-quarter report.

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