Pizza Hut drags Restaurant Brands' sales down

Tough conditions for Pizza Hut dragged down Restaurant Brands' second quarter sales, despite better news from Starbucks Coffee and KFC.

The company today reported total sales for the 16 weeks to September 11 down 0.5 per cent compared to the same period a year ago to $97.7 million.

New Zealand operations produced sales of $88.5 million, down 0.9 per cent, while sales in Australia were up $0.3 million largely due to movements in the exchange rate.

Same store sales for the group were down 2.7 per cent for the quarter.

Pizza Hut New Zealand continued to be hit by a combination of cost increases, tightening economic conditions and competition, the company said.

Non-trading costs would be significantly higher than a year ago with write -downs anticipated on the Pizza Hut Victorian business as the process to sell stores continued.

Group net profit after tax and before non -trading items for the first half of the financial year was still expected to be between $2.5 million and $3 million.

For the fifth consecutive quarter, same store sales grew at KFC, with sales of $54.4 million, up 4.6 per cent for the quarter on both a total sales and a same store basis, the company said.

Sixteen stores had been completely re-vamped to date, with store numbers at 86 after two closures over the quarter. The company was on target to complete a further six store refurbishments by th e end of the financial year and open one new store in Hamilton.

Continued difficult trading conditions and competitive pressures for Pizza Hut New Zealand saw sales for the quarter of $24.9 million, down 14.7 per cent on a year ago, and down 16.5 per cent on a same store basis.

Efforts to counter the trading shortfall included an increased focus on costs and improving in-store operations, a targeted marketing programme and a management restructure.

Store numbers reduced by one over the quarter to 105.

Starbucks Coffee had its 11th quarter of growth with sales of $9.2 million, up 13.1 per cent, while same store growth was 2.5 per cent.

Store numbers were up to 45 with the opening of a new kiosk in Sylvia Park, Auckland.

The Pizza Hut Victoria business continued to be difficult as the company proceeded with its exit strategy.

Total sales for the quarter were A$7.7 million ($8.8 million), the company said.

That was 5.1 per cent down on year ago and down 4.1 per cent on a same store basis, but due to exchange rate movements, reported sales were up 3.9 per cent to $9.2 million.

Store numbers remained at 50 as the company finalised disposal arrangements for the first 20 stores.

For the year-to-date Restaurant Brands' sales totalled $172 million, up $1.4 million or 0.8 per cent on the first half of the year before. Same store sales were down 1.9 per cent.

Restaurant Brands shares closed at $1.07 yesterday having ranged between $1.51 and 94c in the past year.

- NZPA