MTY Food Group (MTY) Q4 2024 earnings summary

Executive summary

• Achieved strong financial performance in fiscal 2024 despite challenging macroeconomic conditions, with free cash flows net of rent at CAD 5.75 per share (CAD 137.9 million).

• System sales grew 2% year-over-year to $1.37 billion in Q4 2024, driven by organic growth and strong US snack brands and Canadian casual dining.

• Network expanded to 7,079 locations, with a net increase of 13 stores in Q4, reversing a net decrease in Q4 2023.

• Returned a record CAD 68.6 million to shareholders via share buybacks and dividends, and repaid over CAD 79.5 million in long-term debt.

• Digital sales grew 9% year-over-year to $1.1 billion, now representing 20% of total sales.

Financial highlights

• Normalized adjusted EBITDA for Q4 was CAD 59.4 million, down 1.6% year-over-year, mainly due to higher wages and supply chain costs.

• Franchising segment EBITDA grew 7.9% year-over-year, with margins rising from 47% to 51%.

• Corporate restaurant segment EBITDA declined 39% due to margin pressure and underperformance at certain brands.

• Reported a net loss attributable to owners of CAD 55.3 million in Q4, or CAD 3.34 per diluted share, due to impairment and FX charges.

• Free cash flows net of lease payments were $27.4 million, down from $33.4 million in Q4 2023.

Outlook and guidance

• Off to a strong start in 2025, especially in Canada, though U.S. performance lags due to adverse weather.

• No formal guidance provided for 2025; positive store growth possible but not guaranteed every quarter.

• Management highlighted continued focus on organic growth, network expansion, and operational efficiency.