A&W FOOD SERVICES OF CANADA INC. ANNOUNCES SECOND QUARTER RESULTS FOR FISCAL 2025
VANCOUVER, BC, July 24, 2025 /CNW/ - A&W Food Services of Canada Inc. (TSX:AW) ("A&W", "Food Services", "we" or "our") today announced its financial results for the 12 and 24-week periods ended June 15, 2025.
All references to "Q2 2025" are to Food Services' 12-week period ended June 15, 2025, to "YTD 2025" are to Food Services' 24-week period ended June 15, 2025, to "Q2 2024" are to Food Services' 12-week period ended June 16, 2024 and to "YTD 2024" are to Food Services' 24-week period ended June 16, 2024. The fiscal 2025 year is 52 weeks and ends December 28, 2025 ("Fiscal 2025").
"We are pleased to report a stronger second quarter for A&W," announced Susan Senecal, Chief Executive Officer. "We successfully opened 4 new restaurants and achieved 3.4% System Sales Growth(i) and Same Store Sales Growth(i) of 1.6%. The growth in Same Store Sales was driven by increases in both average check and guest counts, reflecting the success of our marketing campaigns, including a two-week Canada-wide Teen Burger promotion." Ms. Senecal added, "We continue to be pleased with the performance of our value offerings and marketing initiatives, which have effectively appealed to the needs of our guests today. A significant highlight of the quarter was the launch of A&W Rewards, our new loyalty program, on April 22nd. A&W Rewards provides guests with access to offers, discounts and free rewards, only available on the mobile app, giving them even more reasons to visit A&W."
(i)
System Sales Growth and Same Store Sales Growth are non-IFRS ratios and supplementary financial measures. Please see the "Non-IFRS Measures" section of this news release for further details.
Q2 FINANCIAL HIGHLIGHTS
For Q2 2025, compared to Q2 2024
System Sales(i) of $452.3 million increased by $15.0 million (3.4%)
Revenue increased by $4.5 million (7%) to $68.8 million
Income before income taxes increased by $6.6 million (63%) to $17.2 million
Adjusted EBITDA(i) increased by $4.0 million (18%) to $25.5 million
Operating costs increased by $3.5 million (11%) to $36.0 million, largely attributable to increased marketing-related costs incurred by the National Advertising Fund ("NAF")
General and administrative expenses decreased by $0.5 million (4%) to $11.1 million
Cash Dividend of $0.480 per share declared June 2, 2025 and paid June 30, 2025
Opened 4 new A&W restaurants
(i)
System Sales and Adjusted EBITDA are non-IFRS financial measures. Please see the "Non-IFRS Measures" section of this news release for further details.
SUMMARY OF RESULTS
(unaudited, in thousands of Canadian $)
Q2
2025
Q2
2024
YTD
2025
YTD
2024
Financial Summary
Revenue from franchising
62,988
58,620
118,914
112,046
Revenue from corporate restaurants
5,789
5,701
10,996
11,056
Total revenue
68,777
64,321
129,910
123,102
Operating costs
(36,041)
(32,571)
(69,967)
(62,118)
General and administrative expenses
(11,116)
(11,633)
(22,010)
(22,816)
Royalty expense
-
(12,965)
-
(24,518)
Net finance expense
(3,665)
(349)
(7,534)
(834)
Loss on interest rate swap
(757)
-
(757)
-
Amortization of deferred gain
-
881
-
1,761
Share of income from associates
-
2,869
-
5,444
Income before income taxes
17,198
10,553
29,642
20,021
Income tax expense
(4,672)
(1,758)
(7,859)
(3,716)
Net income
12,526
8,795
21,783
16,305
Net cash generated from operating activities
4,794
6,288
5,301
18,099
Other Metrics
System Sales(i)
452,291
437,309
849,215
826,578
System Sales Growth(i)
3.4 %
1.6 %
2.7 %
1.8 %
Same Store Sales Growth(i)
1.6 %
0.3 %
1.1 %
0.5 %
Net annual restaurant unit growth(ii)
1.9 %
1.3 %
1.9 %
1.3 %
Adjusted EBITDA(i)
25,485
21,513
44,921
40,865
(i)
System Sales, System Sales Growth, Same Store Sales Growth, and Adjusted EBITDA are non-IFRS financial measures, non-IFRS ratios and supplementary financial measures. Please see the "Non-IFRS Measures" section of this news release for further details.
(ii)
Net annual restaurant unit growth reflects the percent increase in A&W restaurants at the ending of the reporting period as compared to the end of the prior year comparable reporting period on a trailing 4 quarter basis.
On October 17, 2024, A&W completed a transaction (the "Transaction") in which Food Services indirectly acquired the trademarks used in the A&W business in Canada through the acquisition of all of the units of A&W Revenue Royalties Income Fund (the "Fund") which it did not already own. Due to the Transaction, the financial results for Q2 2025 are not directly comparable to the financial results for Q2 2024.
For further information regarding the Transaction, please refer to Food Services Q2 2025 Management Discussion and Analysis ("MD&A"), Food Services Annual MD&A for the 52-week period ended December 29, 2024 and the Fund's management information circular dated August 29, 2024 available on the Fund's SEDAR+ profile at www.sedarplus.ca.
Q2 2025 Results Compared to Q2 2024
Total revenue increased by $4.5M which was driven by the opening of more turnkey A&W restaurants and the 3.4% increase in System Sales(i). The System Sales Growth(i) of 3.4% reflects an increase in the number of A&W restaurants and positive ...
