MTY Food Group Inc., one of the largest franchisors and operators of multiple restaurant concepts worldwide, has announced its financial results for the fourth quarter of fiscal 2024, which ended on November 30, 2024. The company highlighted strong network expansion and positive system sales growth despite economic challenges.
Store Growth and System Sales Performance
MTY Food Group continued its expansion momentum in Q4, achieving a net store opening of 13 locations. “I’m happy to share that we expanded our footprint in the fourth quarter, ending strong with a net store opening of 13 locations,” said Eric Lefebvre, CEO of MTY Food Group. “This positive store count is the result of diligent team efforts at MTY, and we’re proud to be strengthening our presence and increasing our availability to guests.”
System sales saw a year-over-year increase of 2%, reaching $1.37 billion compared to $1.34 billion in Q4 2023. The growth was largely driven by strong performances in MTY’s U.S. snack brands and the casual dining segment in Canada. “Year over year, the fourth quarter saw organic growth of system sales, with an improvement of 2% compared to Q4 2023,” Lefebvre noted. “These results were mainly attributable to the impressive performance of our snack brands in the U.S. and our casual dining segment in Canada.”
Franchising Strength and Financial Performance
The company’s franchising segment was a standout performer in Q4, reporting an 8% increase in normalized adjusted EBITDA compared to Q4 2023. “With regards to normalized adjusted EBITDA, I would like to highlight the performance from our franchising segment this quarter, with an 8% increase compared to Q4 2023,” Lefebvre stated. “It is a pleasure to see the dedicated work of our franchise owners and MTY team reflected in these results.”
Overall, revenue for the quarter rose by 2% to $284.5 million, largely due to increased revenues from corporate stores. In Canada, corporate store revenues nearly doubled to $13.9 million, while franchise operations declined by 5% and food processing, distribution, and retail sales dropped by 10%. The U.S. and international segments saw revenue growth, benefiting from a 10% rise in promotional fund revenues and a 2% increase from franchise operations.
However, net income was negatively impacted by impairment charges and foreign exchange losses. MTY reported a net loss of $55.3 million, or $(2.34) per share, compared to a net income of $16.4 million ($0.67 per share) in Q4 2023. This decline was primarily due to a $64.6 million impairment charge on goodwill related to the Papa Murphy’s brand and a $26.3 million foreign exchange loss on intercompany loans.
Liquidity, Debt Management, and Dividends
MTY continued to demonstrate disciplined financial management in Q4, generating $43.7 million in cash flows from operating activities. The company reimbursed $17.5 million in long-term debt, paid $6.6 million in dividends to shareholders, and repurchased 314,700 shares for $14.0 million.
As of November 30, 2024, MTY had $50.4 million in cash on hand and $706.6 million in long-term debt. The company’s hedging strategies provided quarterly interest savings of approximately $0.8 million.
On January 22, 2025, MTY declared a quarterly dividend of $0.33 per common share, payable on February 14, 2025, to shareholders of record as of February 4, 2025.
About MTY Food Group
Headquartered in Montreal, MTY Food Group operates and franchises quick-service, fast-casual, and casual dining restaurants under 85 different banners across Canada, the U.S., and internationally. With a network of 7,079 locations, MTY continues to expand its presence through strategic growth initiatives, acquisitions, and franchise development.
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