MTY Food Group Inc., one of the largest franchisors and operators of multiple restaurant concepts worldwide, reported Friday its financial results for its 13 week period of 2026 ended May 31, 2026, indicating a decrease in revenue and same store sales as it announced it will be closing 68 of its corporate locations in the coming months.
Following a detailed review of its portfolio, the company said it has made the decision to close 68 of its corporate locations in the coming months, which had combined losses of over $10 million in the last 12 months.
The early termination of the related leases remains to be negotiated with the landlords and can fluctuate depending on the term left of each specific lease and the terms of those leases. The estimated total cost is expected to range between $10 million and $12 million. This will affect free cash flows in the short term, but will help teams focus on healthier, more profitable locations in the future. Estimated completion of all the closures and lease buyout negotiations will take between six and nine months, it explained.
“MTY continues to navigate a dynamic operating environment. The 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, leveraging data and AI to improve our understanding of customers and improve communications with existing, lapsed and potential guests, 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 as MTY continues to see strong demand for its brands. It anticipates an improvement in the pace of openings in the coming quarters and remains confident in its ability to achieve net location growth in the future.
“Management notes that certain macroeconomic and policy-related uncertainties could affect performance. To date MTY has only seen modest direct impacts from tariffs, and although the exact impact is difficult to measure, the increases in oil and gas prices has undoubtedly affected consumer confidence and spending in restaurants.
“In both Canada and the US, the Company primarily sources products domestically, which helps limit the potential exposure to tariffs. Oil and gas prices may have longer impacts should the war in the Middle East continue primarily impacting supply chain costs and margins for franchisees, corporate stores and the retail segment. 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.
“Management expects stability in normalized adjusted EBITDA margins across each of its segments, though the Company may experience some fluctuations in corporate store margins. Overall, management remains confident about its ability to drive margin improvement through positive unit growth, enhanced efficiencies, and an ongoing reduction in the number of less profitable corporate stores.”
“Our second quarter results reflected continued pressure on consumer spending and a challenging operating environment,” said Eric Lefebvre, Chief Executive Officer of MTY. “Despite these headwinds, our asset-light and diversified model continued to generate strong free cash flow from operations, and we remained focused on executing against our development pipeline, with positive store openings progressing in line with our plans and a strong slate of openings expected through the balance of the year.”
“We are also taking decisive action to improve the quality and profitability of our corporate store portfolio. Following a detailed store-by-store review, we have made the decision to close 68 underperforming corporate-owned locations over the next nine months. This is a decisive step to address underperforming assets and improve the overall quality of our corporate store portfolio. While this action will reduce our store count in the near term, we believe it will strengthen the business over the long term by reducing losses and allowing us to focus resources on our strongest opportunities. We remain committed to disciplined execution, strong cash generation and creating long-term value for shareholders.”
At the end of the 13 week period, MTY’s network had 7,040 locations in operation, of which 6,808 were franchised or under operator agreements and 232 were corporate-owned. The geographical split among MTY’s locations remained stable year-over-year at 57% in the US, 35% in Canada and 8% International.
During the 13 week period, MTY’s network opened 84 locations (2025 period – 76 locations) and closed 78 others (2025 period – 77 locations), resulting in net positive store growth of 6 locations (2025 period – net decrease of 1 location).
System sales were $1.4 billion in the 13 week period, a decrease of 3.5% compared to the same period in 2025. Excluding the impact of foreign exchange, which accounted for 49% of the decrease, organic system sales decreased 1.7%, with the US in line with the overall figure and Canada down 2.7%, it said.
Same-store sales decreased 2.1% year-over-year in the 13 week period. By region, Canada and the US were relatively similar with decreases of 1.8% and 2.2%, respectively while International experienced a 5.2% decrease.
Digital sales remained resilient in the 13 week period of 2026 at $284.2 million, including the impact of foreign exchange rates, representing 21% of total sales. As a % of total system sales, digital sales remained stable representing 20.7% of system sales compared to 20.8% in prior year.
Company revenue was $279.9 million in the second quarter, a decrease of 8.2% compared to the same period in 2025, primarily attributable to lower revenue from corporate stores, which was tightly correlated to a decrease in the number of corporate-owned locations, as well as lower revenue from turnkey projects and the impacts of foreign exchange, said MTY.
Net income attributable to owners totaled $15.4 million, or $0.67 per share, in the second quarter compared to $57.3 million, or $2.49 per share, for the same period in 2025. The change was primarily due to lower adjusted EBITDA and a stronger Canadian dollar relative to the US dollar which resulted in a loss of $7.6 million in the 13 week period compared to a gain of $35.0 million in the 2025 period. The 2026 period was also impacted by a $7.5 million impairment loss on right-of-use assets, resulting from managements decision to close 68 corporate locations compared to an impairment of $0.2 million in prior year.
Normalized adjusted EBITDA, which excludes acquisition-related expenses and SAP project implementation costs, was $60.2 million, a decrease of $9.8 million compared to 2025. The change was due to reduced profitability from corporate operations mostly in the U.S. and International segment together with lower contributions from franchising operations. These factors reflected continued pressure from commodity and other operating costs, as well as softer consumer spending in certain markets, added the company.
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