A&W Food Services of Canada Inc. has announced its financial results for the 16-week and 52-week periods ended December 29, 2024. The company reported strong operational progress and strategic developments, despite facing a challenging environment in the quick service restaurant (QSR) industry.
Q4 2024 Highlights
For the 16-week period ended December 29, 2024 (Q4 2024), A&W posted system sales of $576.8 million, maintaining consistency with Q4 2023. However, the company experienced a revenue decrease of $9.7 million (9%) compared to the previous year. Despite this, income before income taxes increased significantly by $8.7 million (72%) compared to Q4 2023. Adjusted EBITDA saw a slight increase of $0.2 million (1%), reaching $27.9 million.
Operating costs decreased by $11.7 million (19%) in Q4 2024, and general and administrative expenses were reduced by $1.7 million (10%) compared to the same period last year. During Q4 2024, A&W opened 9 new restaurants, contributing to its growth, it said.
Fiscal 2024 Highlights
For the 52-week period ended December 29, 2024 (Fiscal 2024), A&W achieved record system sales of $1.87 billion, surpassing its previous high of $1.85 billion in Fiscal 2023. Revenue for the year decreased by $7.0 million (2%) year-over-year, while income before income taxes increased by $2.9 million (6%).
Adjusted EBITDA rose by $1.2 million (1%) to $93.5 million, and operating costs decreased by $6.9 million (4%). However, general administrative expenses increased by $1.5 million (3%) in Fiscal 2024. A&W also opened 28 new restaurants during the year, along with its first stand-alone Pret restaurant, reflecting its continued growth and expansion, reported the company.
Net Annual Restaurant Unit Growth
A&W said it significantly increased its pace and number of restaurant openings in Fiscal 2024. The company opened 28 new restaurants, an improvement over the 19 restaurants opened in the previous fiscal year. While 11 restaurants were closed in 2023, only 9 closures occurred in 2024, resulting in a net restaurant count increase of 19 in 2024, compared to 8 in the prior year.
This growth in restaurant openings and fewer closures led to a Net Annual Restaurant Unit Growth of 1.8% in 2024, compared to 0.8% in 2023. A&W attributes this increase to the stabilizing construction timelines following the multi-year slowdown in real estate transactions and construction timelines that resulted from the COVID-19 pandemic, which had significantly impacted the construction and real estate industries.
Strategic Developments
Reflecting on the year, A&W CEO Susan Senecal shared her thoughts on the company’s performance: “Reflecting on 2024, A&W has a lot to celebrate and be proud of. We opened 28 new A&W restaurants and opened our first stand-alone Pret restaurant.”
She also highlighted menu innovations, including the South Asian-inspired Veggie Masala Burger and the Spicy Peri Peri Buddy Burger lineup, alongside the nationwide rollout of Pret coffee at A&W locations.
Senecal emphasized the company’s response to a more challenging environment in 2024. “We have renewed our marketing strategy to reflect the growing importance of value and affordability to Canadians. With the decline in disposable income pressuring consumers and the intense price competition in the quick service restaurant industry, we recognize the need for more price activity and offers as well as doubling down on our successful innovation.”
Looking ahead, Senecal spoke about the company’s plans for 2025: “We have made solid advancements on many of our strategic areas in 2024, including a redesigned restaurant operating system which will be rolled out in 2025. We are excited to bring more efficiency and guest experience enhancements to life at our restaurants and for our franchisees.”
Strategic Combination with the Fund
In Q4 2024, A&W completed an important transaction that altered its corporate structure. On October 17, 2024, A&W acquired all remaining units of the A&W Revenue Royalties Income Fund (the “Fund”) that it did not already own, indirectly gaining control of the A&W Trademarks. This acquisition led to the de-listing of the Fund’s units from the Toronto Stock Exchange (TSX) and the listing of A&W’s common shares under the symbol AW.TO on October 18, 2024.
This strategic move simplifies the company’s structure and strengthens its position for future growth.
Both A&W and Harvey’s are seeing a huge push from the buy Canadian support Canadian movement that has taken over our great nation since Trump decided to attack our sovereignty and tariff us. The biggest Canadian reddits listing Canadian brands has A&W always near the top with Harvey’s not far behind with a push to boycott US chains. Since this is a recent movement this won’t be reflected in their quarterly numbers, I’d be curious to see you report on their next quarters numbers to see how impactful this patriotic movement has been! ELBOWS UP!!!
Same. I anticipate that A&W is going to have a very rosy and well deserved first quarter.