Meritage Hospitality Q4 sales fall, net loss widens on high costs, closures

Overview

• Franchise operator's Q4 sales fell to $145 mln, impacted by high costs and closures

• Company reported Q4 net loss of $13.4 mln, down from $5.2 mln profit last year

• Company expects EBITDA recovery in 2026 with cost-saving initiatives and new products

Outlook

• Meritage expects 2026 sales of $610 mln to $620 mln

• Company projects 2026 EBITDA of $18.0 mln to $20.0 mln

• Meritage anticipates earnings from operations of $6.0 mln to $7.0 mln in 2026

Result Drivers

• MARGIN COMPRESSION - Co experienced margin compression due to record-high prime costs, particularly beef inflation and elevated discounting

• COST PRESSURES - CEO highlighted efforts to combat cost pressures and improve productivity amid operational disruptions

• COST-SAVING INITIATIVES - Co expects EBITDA recovery in 2026 through cost-saving initiatives and new product innovations

Key Details

Analyst Coverage

• Wall Street's median 12-month price target for Meritage Hospitality Group Inc is $20.00, about 788.9% above its January 16 closing price of $2.25

Press Release: ID:nGNX3ZKTKr

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