Pizza Hut flattens Restaurant Brands' Q3 sales

Restaurant Brands today reported flat same-store sales for the third quarter, with higher sales at KFC and Starbucks offset by softer sales at Pizza Hut.

Same-store sales across the fast food group were up just 0.1 per cent for the quarter. Total sales for the period were $71.8 million, up 2.5 per cent on the $70 million reported for the same time last year.

KFC continued its turnaround, reporting a 2.6 per cent increase in same-store sales for the quarter. Total KFC sales were up 2.4 per cent on the year-earlier at $39.2 million.

KFC has refurbished six outlets as part of a "brand transformation" and is working on updating a seventh.

The company has also opened new stores, one in Taihape and another in Kaikohe.

During the quarter, KFC updated its burger range, launching two new burgers, and has also trialled an extension to its menu at its New Lynn store.

Starbucks Coffee reported a 3.4 per cent increase in same store sales for the third quarter. Sales for the period totalled $6.4 million, up 16.2 per cent on the $5.5 million reported for the same period last year.

Two new Starbucks outlets opened in the third quarter, bringing the total number of stores in New Zealand to 42. One store has opened in the fourth quarter, with two more due to be rolled out before the end of the financial year.

Same-store sales were softer at Pizza Hut New Zealand and in Victoria.

Same-store sales in New Zealand fell 3.9 per cent during the third quarter. Total sales were worth $20.4 million for the quarter, up 2.7 per cent on the $19.9 million posted for the same period last year.

Total sales growth was driven by the opening of two new stores.

Restaurant Brands said Pizza Hut's weaker same-store sales were due to strong competition, the impact of new stores on existing stores, softer retail spending and unseasonably warm weather.

The group expected same store sales to remain soft for the rest of the year.

Pizza Hut Victoria also continued to underperform, with same-store sales dipping 5.7 per cent during the quarter. Total sales fell 8.8 per cent to $6.4 million.

Restaurant Brands said the downturn was due to continued poor promotions and strong competition.

Restaurant Brands is looking to rationalise its presence in Victoria, and has been seeking franchises for a number of stores.

"Although no store re-franchising has been completed to date, it is anticipated that this will begin to take place early in the next financial year," the company said.

Looking at the full year, Restaurant Brands said it expected to deliver an annual profit in line with the $10.7 million it posted last year.

"It is anticipated lower earnings in the Pizza Hut business will be offset by improved earnings in KFC and Starbucks Coffee; however this is reliant on Pizza Hut sales not softening further and no further deterioration in Pizza Hut Victoria sales," the company said.

Shares in Restaurant Brands were unchanged at $1.25 in early trading today, having ranged between $1.20 and $1.68 over the past 12 months.

- NZPA