MTY Food Group Q2 net income surges on foreign exchange gains

Overview

• MTY Food fiscal Q2 revenue largely in line with analyst expectations, per LSEG data

• Adjusted EPS for Q2 missed analyst expectations, per LSEG data

• Net income surged due to foreign exchange gains

• Company repurchased 297,000 shares for C$12.6 million

Outlook

• MTY expects stability in 2025 normalized adjusted EBITDA margins across all segments.

• Company anticipates improved pace of net openings in future quarters.

• MTY actively implementing strategic initiatives for U.S. market growth.

• Company monitoring tariff impacts, implementing mitigation strategies if needed.

Result Drivers

• FOREIGN EXCHANGE GAINS - Net income surged due to a C$35 million foreign exchange gain, primarily on intercompany loans

• US MARKET PRESSURE - Same-store sales in the US declined by 3.8%, impacting overall sales performance

• CANADIAN GROWTH - Strong performance in Canada with a 3% increase in organic system sales, driven by casual dining segment

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy."

• Wall Street's median 12-month price target for MTY Food Group Inc is C$50.50, about 9.5% above its July 10 closing price of C$45.70

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nGNX4XrvMc