Restaurant Brands report flat sales

Restaurant Brands said today its fourth quarter same store sales were flat, with KFC and Starbucks sales strongly positive but both the New Zealand and Victorian Pizza Hutt businesses suffering from weaker demand.

Annual same store sales increased 0.5 per cent for New Zealand operations and just 0.1 per cent for the company as a whole.

Total sales, including new stores, for the 12-week quarter ended February 27 (correct) were $74 million, up 2.8 per cent increase on the same quarter last year.

Total annual sales for the company were $316.4m, up 2.1 per cent.

The Starbucks Coffee chain was the main driver of total sales growth with Pizza Hut New Zealand also assisting due to new store openings.

Chief executive Vicki Salmon warned of significant non-trading writedowns from the company's pizza businesses as non-performing stores were sold.

"Margins in both Pizza Hut businesses have been unfavourably impacted by the tighter trading conditions," she said.

There had been an offset from an improvement in KFC.

"The overall profit result (excluding non-trading items) for the year is expected to be slightly less than that achieved in the prior year."

Last year, the company posted a $10.7m net profit.

KFC's fourth quarter sales were $41.9m, up 6.4 per cent on the equivalent 12-week quarter. On a same store basis, sales increased a healthy 5.4 per cent for the quarter.

KFC finished the year with total sales of $171.8m, up 1.1 per cent. Same store sales growth was 1.9 per cent for the year.

Ms Salmon said the strong sales performance in the fourth quarter was down to excellent operating disciplines, the increasing positive impact of store transformations across the brand and a successful promotional calendar.

Store numbers rose one to 88.

All transformed stores were performing at or above expectations, Ms Salmon said.

Pizza Hut New Zealand was hit by competition pressures, cannibalisation from new store growth and a light promotional calendar.

Total sales fell 4.7 per cent to $18.8m in the quarter and same store sales were down a worrying 8.4 per cent.

For the full year, sales were up 3.9 per cent at $89.1m, with growth from store openings. Same store sales were down 2.9 per cent.

Starbucks total sales in the rose 18 per cent to $7.1m while same store growth was 2.8 per cent. Annual sales were up 14.4 per cent to $27.9m and same store growth was 2.6 per cent.

Pizza Hut Victoria fourth quarter sales fell 11.2 per cent to A$5.6m ($6.4m). Sales over the year fell 4.9 per cent to A$25.5m and same store sales declined 3.8 per cent for the year.

Restaurant Brands shares were unchanged at $1.28. They have traded between $1.20 and $1.68 during the past year.

- NZPA