TV rugby-fan dive eats into pizza sales

Restaurant Brands is blaming the latest fall in sales at Pizza Hut on the low TV ratings for rugby during the past winter and has slashed profit forecasts.

Second-quarter Pizza Hut sales of $24.9 million were down 14.7 per cent on the year before, and 16.5 per cent on a same-store basis, the company said yesterday. The drop largely wiped out gains in the company's rejuvenated KFC franchise.

The fast-food operator forecast half- year net profit would be $2.5 million to $3 million - compared with $5.2 million for the same period in 2005 - due to "cost increases, tightening economic conditions and competition".

Restaurant Brands chief executive Vicki Salmon said pizza sales were directly influenced by the number of people watching rugby on TV, especially free-to-air TV, as fans ordered in a pizza during the games.

AGB Nielsen people-meter figures show rugby viewing was down 30 per cent across pay and free-to-air during this year's Tri-Nations competition.

Free-to-air viewing for Tri-Nations rugby was down 199,200 viewers, or 47 per cent on 2005.

But Salmon said Pizza Hut had other problems and second-quarter sales were down slightly on 2004 as well as 2005. The lower sales were also due to continued "difficult trading conditions and competitive pressures".

Analyst Guy Hallwright of stockbrokers Forsyth Barr estimated the Lions tour in 2005 might have added 5 per cent to Pizza Hut sales for the second quarter last year.

Overall, Restaurant Brands took $97.7 million in sales for the quarter ended September 11, up 0.5 per cent.

Its biggest brand KFC had sales of $54.4 million, up 4.6 per cent on a same-store basis.

Restaurant Brands has said some KFC outlets given a makeover as part of a $15 million capital spend increased sales by 25 per cent. Starbucks sales were $9.2 million, up 13.1 per cent.

The company promised an increased focus on cost, improving stores' targeted marketing, and a management restructure. Its shares closed at $1.05, down 2c, yesterday.

FEWER BITES

* A 14.7 per cent fall in second-quarter sales at Pizza Hut has eaten into the growth at KFC.

* Restaurant Brands is planning a write-off for the sale of 20 Pizza Huts in Victoria, Australia.

* Upcoming results for net profit is estimated at $2.5 million to $3 million for the half year to September 11.