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KFC is Restaurant Brands’ highest performing business in New Zealand.
The operator of KFC, Carl’s Jr, Pizza Hut and Taco Bell says continued global inflationary pressures, including rising ingredient and wage costs means its its annual net profit will come in at between $12 million and $16m.
In a market update, Restaurant Brands acknowledged the profit guidance would come as a disappointment to shareholders.
The company said it had a soft first half of the 2023 financial year and continued to navigate a challenging market.
It said its performance in the year had been impacted significantly by continued cost increases in the New Zealand business which exceeded earlier expectations, and lower than expected sales growth in its California and Hawaii businesses.
“Given these factors will continue for some time, at a level far greater than anticipated, it has become apparent that recovery in the second half is also going to be weaker than expected,” chairman José Parés said..
“While the business has implemented a strategic programme of price increases and cost control measures to relieve margin pressures, we have not yet been able to raise prices to fully offset the input cost increases,” Parés said.
LAWRENCE SMITH/Stuff
Fried chicken can be real comfort food. Packed with salt and other flavours, it initiates a hedonic response in the brain. Too much of it, however, can lead to health issues.
The near-term focus was on managing cost pressures and margin performance, he said.
Restaurant Brands will release its half year trading results on August 28.
The company increased its second quarter sales to June 30 to $331.6m, up 7% or $22.1m.
Meanwhile, total sales in the period increased by 9.4% to $640.2m.
Restaurant Brands put the increase in sales down to ongoing recovery from the impacts of the 2022 Covid-19 Omicron outbreak and price increases that were implemented across its four markets, alongside the establishment of 10 new stores and the strengthening US dollar.
In New Zealand , second quarter sales were $142.9m, up 7.2% and 4.7% on a same store basis.
Sales grew across all brands, largely driven by price increases and the easing of trading constraints.
Total year to date sales were $272.3m, up 8.1% on the prior year and 6% on a same store basis.
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