MTY Food Group Inc., one of the largest franchisors and operators of multiple restaurant concepts worldwide, has reported third-quarter financial results for fiscal 2025, ended August 31, showing a decline in net income despite growth in normalized adjusted EBITDA and net store openings.
At the end of the third quarter of 2025, MTY’s network had 7,061 locations in operation, of which 6,805 were franchised or under operator agreements and 256 were corporate-owned. The geographical split among MTY’s locations remained stable year-over-year at 58% in the US, 35% in Canada and 7% International.
During the third quarter of 2025, MTY’s network opened 96 locations (Q3 2024 – 67 locations) and closed 81 others (Q3 2024 – 108 locations) for a net positive store growth of 15 locations.
Company revenue increased by 1% to reach $297.0 million in the third quarter, driven by growth in the processing, distribution and retail segment, partially offset by a decline in the franchise and corporate segments, MTY explained.
“Net income attributable to owners totaled $27.9 million, or $1.22 per share ($1.22 per diluted share), in the third quarter compared to $34.9 million, or $1.46 per share ($1.46 per diluted share), for the same period in 2024. The year-over-year decrease can mainly be attributed to impairment losses of $6.2 million on its intangible assets related to the franchise rights and trademarks for one brand in the US & International geographical segment and 3 brands in the Canadian segment,” said the company.
“Normalized adjusted EBITDA, which excludes acquisition-related expenses and SAP project implementation costs, increased by $2.1 million year-over-year to reach $74.0 million in the third quarter of 2025 primarily due primarily to the recognition of a $5.8 million Employee Retention Credit received (ERC) from the U.S. government during the quarter. Excluding the ERC, normalized adjusted EBITDA would have reflected a modest year-over-year decline.”
System sales reached $1.46 billion in the third quarter of 2025, representing a modest year-over-year decrease. The US segment experienced an overall sales decrease of 2%, due to a decline in same store sales, slightly offset by the positive impact of foreign exchange rates while Canada was largely flat compared to prior year, said the company.
Same-store sales decreased 1.6% year-over-year in the third quarter. By region, Canada fell by 0.3%, the US dropped 2.5%, while International saw an increase of 0.8%, it said.
Digital sales increased by 1% for the quarter to reach $273.4 million compared to $270.7 million in Q3-24 mainly due to an improvement of 8% in the Canadian segment, it added.
Normalized adjusted EBITDA increased 3 per cent year-over-year to $74.0 million, which includes a $5.8 million Employee Retention Credit from the U.S. government. Excluding the credit, the metric would have reflected a slight decline.
“While Q3 reflected ongoing macroeconomic volatility, we are encouraged by the sequential improvement at some of our larger banners, including Cold Stone Creamery and Wetzel’s Pretzels,” said Eric Lefebvre, CEO of MTY. “These results support our confidence in the resilience of our brands, and we remain focused on executing initiatives that will strengthen our position as conditions improve.”
“Positive net store openings this quarter demonstrate the demand for our leading concepts and the outstanding execution of our teams. These new locations reinforce our brand strength and position us for continued financial growth.
“I also want to acknowledge our teams’ dedication in successfully implementing the ERP system across Canada, with the U.S. rollout underway and well on track. These results support our confidence in the resilience of our brands, and we remain focused on executing initiatives that will strengthen our position as conditions improve.”
MTY said it continues to navigate a dynamic operating environment.
“Third-quarter performance showed a sequential improvement at MTY’s larger banners. That said, macro-economic conditions continue to create short-term headwinds and the Company continues actively implementing a range of strategic initiatives to position the business for growth once the environment improves. These include, and are not limited to, driving menu innovation, maintaining product quality and consistency, enhancing both online and in-store customer experiences, and reinforcing a strong value proposition across its banners,” it said.
“The pipeline of future locations remains strong. This quarter’s positive net openings was in line with expectations. MTY continues to anticipate an improvement in the pace of openings in the coming quarters and continues to see strong demand for its brands, especially the larger ones.”
MTY said it has only seen modest direct impacts from tariffs. In both Canada and the US, the company primarily sources products domestically, which helps limit the potential exposure. Management remains confident in its ability to navigate potential impacts through its strong supply chain and procurement capabilities, strategic menu adjustments, and, when necessary, pricing actions, it said.
MTY Group franchises and operates quick-service, fast casual and casual dining restaurants over 80 different banners in Canada, the US and Internationally. Based in Montreal, MTY has 7,061 locations.
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