MTY Food Q4 System Sales Rise 8%

MTY Food Group (TSE: MTY) reported higher sales and profits in the fourth quarter of 2021.

MTY owns more than 80 restaurant brands, including well-known food court brands like Thai Express and La Cremiere. 

Revenue & Earnings

Revenue came in at C$146.3 million in the three months ended November 30, an increase of 15% from C$127.2 million in the prior-year quarter. System sales rose 8% to C$962.5 million. They were up 24% in Canada and 12% internationally but down 1% in the United States due to the unfavorable impact of exchange rate fluctuations.

Net income attributable to owners amounted to C$24.9 million (C$1.01 per share) in Q4 2021, up from C$20.1 million (C$0.81 per share) in Q4 2020.  

The franchisor and restaurant operator increased its quarterly dividend by 14% on January 18, 2022, to C$0.210 per share.

CEO Commentary

MTY CEO Eric Lefebvre said, “In the fourth quarter, adjusted EBITDA increased 22% to $42.8 million, while system sales grew 8% over the same period last year. We also reduced our long-term debt, paid out a quarterly dividend and repurchased shares under our NCIB program. Despite the ongoing pandemic and other temporary issues affecting MTY, our long-term growth strategy remains unchanged. We seek to deliver organic growth, based on a market recovery, investments in our network and a strong franchise pipeline, while searching for accretive acquisitions at reasonable valuations.”

Although temporary closures increased during the first quarter of 2022 due to additional government restrictions, as of February 16, 2022, only 71 locations remain temporarily closed. This is a decrease of 11 since November 30, 2021.

Wall Street’s Take

Last month, National Bank Financial analyst Vishal Shreedhar kept a Buy rating on MTY and C$75. This implies 39.3% upside potential.  

As Shreedhar is the only analyst to have offered a stock rating for MTY in the last three months, the average MTY Food Group price target is C$75.

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