KEY POINTS:
New-look stores and a new product range for the KFC fast food chain continued to drive sales growth for Restaurant Brands in the third quarter.
The NZX listed company - which operates the KFC, Starbucks and Pizza Hut brands - yesterday reported total sales of $67.8 million for
the three months to December 4, an increase of 2.7 per cent on the same period last year. Same-stores sales were up by 3.6 per cent.
KFC was the star, showing total sales growth of 7.8 per cent - to $42 million - and a same-stores sales increase of 10.9 per cent.
Signs of the turnaround were there in the last few quarters but "for the market this is real proof", said chief executive Vicki Salmon.
But Pizza Hutt stores continued to disappoint. Sales declined 9.8 per cent on the same period a year earlier to $18.4 million. They were also down 10.9 per cent on a same-store basis.
The final figures looked worse compared to last year, when Pizza Hutt had delivered record results, although sales had stabilised in the last quarter, Salmon said.
But the year had been a tough one, with increased competition and an economy-driven slowdown of first-half sales.
There was still work to be done on the Pizza Hutt brand, she said. A KFC-style makeover was likely.
"We know what to do; it's about stepping up and spending a bit more money and having a strategic long-term view of the business. We'll do this in the pizza category as well."
Most of Restaurant Brands' struggling Victorian operations were sold at the start of the month. The full exit from Victoria is expected to cost the company about $9 million but will improve group operating earnings by $3 million a year.
Starbucks continued its run of 12 consecutive quarters of growth - although that comes off a low base and is not a big contributor to group earnings.
Sales for the quarter were up 11.4 per cent to $7.1 million.
Restaurant Brands shares were unmoved yesterday - closing at $1.06.
Forsyth Barr retail analyst Guy Hallright said takeover talk was having a bigger influence on the stock than short-term sales figures.
"I don't think people are really looking too hard at those quarterly sales figures. I think they are looking for something else on whatever approaches the company is getting ... from whoever it is."
Restaurant Brands confirmed on November 30 that it had been approached by parties interested in taking a stake in the company.
Salmon said yesterday that discussions were at an early stage. She would not comment further on the issue.
