A&W Food Services of Canada Inc. announced Friday its financial results for the 12-week period ended March 23, 2025, as the company experienced sales and revenue growth while expanding its footprint.
“We opened 7 new A&W restaurants and grew System Sales by 2% in Q1 2025, despite the impact of severe weather conditions on guest counts in many Canadian communities, particularly acute in period two of the quarter,” said Susan Senecal, Chief Executive Officer.
“During the quarter, we achieved positive same store sales growth of 0.4% which is positive given that the first quarter was the strongest quarter of 2024 in terms of same store sales growth. This reflects our efforts to provide more value offerings in 2025 given the shift in consumer pressures and slowdown in the economy that started mid-year last year. In Q2, we continue to navigate adverse weather and uncertain economic conditions due to recent tariffs and counter-tariffs but are pleased with the performance of our value offerings and marketing initiatives in this last quarter and in their ability to better appeal to value-conscious guests. We are proud to be fully Canadian owned and operated, now more than ever, and have been happy to see many Canadians discovering or re-discovering this fact.
“I am thrilled that we launched A&W Rewards, our new loyalty program, on April 22nd, after the end of Q1. This program gives guests even more reason to visit A&W and we are excited for the contribution it can make to our growth in the digital space, an important segment for QSR. Now, more than ever, with so much macro economic uncertainty we are also pleased with our progress through the end of Q1 2025 on our strategic path to achieving 30% profitability improvement for our franchisees by 2028.”
Q1 2025 FINANCIAL HIGHLIGHTS
(as compared to Q1 2024)
- System Sales of $396.9 million increased by $7.7 million (2%)
- Revenue increased by $2.4 million (4%)
- Income before income taxes increased by $3.0 million (31%)
- Adjusted EBITDA was $19.4 million, consistent with Q1 2024
- Operating costs increased by $4.4 million (15%), largely attributable to increased marketing-related costs incurred by A&W’s National Advertising Fund
- General and administrative expenses decreased by $0.3 million (3%)
- Cash Dividend of $0.480 per share declared March 5, 2025 and paid March 28, 2025
- Opened 7 new A&W restaurants
“Subsequent to the end of Q1 2025, on April 3, 2025 the U.S. Government announced sweeping tariffs on goods imported into the U.S. from a variety of trading partners, including Canada. As a result, the Canadian government announced retaliatory tariffs on U.S. originated imports into Canada becoming the first of many announcements related to tariffs by both countries that has served to create significant market uncertainty and increase the probability of these measures having significant impacts on Canadian unemployment rates, consumer confidence and discretionary spending, and the Canadian economy more broadly,” said the company.
“As a result of these macroeconomic conditions, we have updated our 2025 outlook for Adjusted EBITDA, System Sales Growth and Same Store Sales Growth downward from what was presented in Food Services’ Annual MD&A for the 52-week period ended December 29, 2024. Due to the pace at which we are opening new A&W restaurants we have amended the 2025 outlook for total number of restaurants expected to be open by the end of Fiscal 2025 upwards from what was presented in Food Services’ Annual MD&A for the 52-week period ended December 29, 2024.”
The company said it now expects the following for Fiscal 2025:
- Adjusted EBITDA to be between $96 million and $101 million ($93.5 million in Fiscal 2024, Income before income taxes of $50.0 million in Fiscal 2024);
- Total A&W restaurants to be between 1,085 and 1,100 by the end of Fiscal 2025 (1,073 by end of Fiscal 2024);
- Annual System Sales Growth of 1.5% – 4.5% (0.8% in Fiscal 2024); and
- Annual Same Store Sales Growth of 0.0% – 3.0% (-0.6% in Fiscal 2024).
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