- Pizza Pizza Royalty Corp. (TSX:PZA) released its financial results for the three months and nine months ended September 30, 2024, revealing a challenging quarter for the popular pizza chain
- Same store Q3 sales decreased by 5.3 per cent, a significant drop compared to a 7.0 per cent increase in the same quarter last year
- Year-to-date same store sales decreased 2.7 per cent for the nine-month period, compared to a 9.8 per cent increase in the previous year.
- Pizza Pizza stock (TSX:PZA) last traded at C$13.26
Pizza Pizza Royalty Corp. (TSX:PZA) released its financial results for the three months and nine months ended September 30, 2024, revealing a challenging quarter for the popular pizza chain.
Q3 highlights
- Same store sales: Decreased by 5.3 per cent, a significant drop compared to a 7.0 per cent increase in the same quarter last year.
- Royalty pool sales: Fell 4.6 per cent to C$155.8 million, down from C$163.2 million in Q3 2023.
- Adjusted earnings per share (EPS): Decreased 6.3 per cent to $0.239.
- Restaurant network: Expanded by six net locations, bringing the total to 774.
Year-to-date highlights
- Same store sales: Decreased 2.7 per cent for the nine-month period, compared to a 9.8 per cent increase in the previous year.
- Royalty pool sales: Decreased 1.0 per cent to C$460.0 million from C$464.4 million in the same period last year.
- Adjusted EPS: Decreased 2.3 per cent to $0.707.
- Restaurant: Increased by 16 net locations year-to-date.
A smaller slice of success
The royalty pool system sales for the quarter were primarily impacted by the offsetting effects of new restaurant openings and declining same store sales. Notably, sales from the 672 Pizza Pizza restaurants decreased 5.0 per cent to C$134.9 million, while Pizza 73 locations saw a smaller decline of 1.8 per cent, totaling C$20.8 million.
Despite these challenges, the company declared dividends of C$5.7 million for the quarter, or $0.2325 per share, up from C$5.5 million in the same quarter last year. The payout ratio increased to 109 per cent, compared to 93 per cent in the prior year.
Management remains optimistic about future growth, projecting a 3-4 per cent increase in its traditional restaurant network and continuing its renovation program throughout 2024. The company opened five traditional and three non-traditional Pizza Pizza restaurants during the quarter, while also closing three non-traditional locations.
As Pizza Pizza navigates these financial hurdles, the focus will be on revitalizing sales and expanding its footprint in a competitive market. This comes as restaurants across the country, from major to independent, struggle to pay the bills as it seems fewer people choose to dine out post-COVID restrictions. Even so, the pizza chain has been working to open new stores.
About Pizza Pizza
Pizza Pizza Royalty Corp., through Pizza Pizza Royalty Limited Partnership, owns the trademarks, trade names and other intellectual property used by Pizza Pizza Ltd. in its Pizza Pizza and Pizza 73 restaurants and in its international franchising business.
Pizza Pizza stock (TSX:PZA) last traded at C$13.26 and has sliced off 9.92 per cent of its share value since the year began.
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(Top image via Pizza Pizza)