A&W FOOD SERVICES OF CANADA INC. ANNOUNCES THIRD QUARTER RESULTS FOR FISCAL 2025

Executive Summary

• A&W Food Services of Canada reported Q3 2025 results showing a $14.6 M increase in income before taxes to $23.6 M and adjusted EBITDA up 5% to $25.8 M, driven by higher system sales, lower operating costs and the cessation of royalty expense after its 2024 trademark acquisition.
• System Sales rose 3.1% year‑over‑year to $479.6 M; same‑store sales grew 1.4%, marking a third consecutive quarter of positive same‑store growth despite macro‑economic headwinds.
• The company declared a cash dividend of $0.480 per share and reaffirmed its FY 2025 guidance for adjusted EBITDA ($96–$101 M) and total restaurant count (1,085–1,100).

Key Details

• Financial Highlights – Q3 2025 vs. Q3 2024
• System Sales: $479.6 M (+3.1%)
• Revenue: $71.2 M (‑6%), reflecting seven fewer restaurant openings versus the prior year quarter.
• Income before taxes: $23.6 M (+163%).
• Adjusted EBITDA: $25.8 M (+5%).
• Operating costs down $14.2 M (‑31%) to $31.8 M; marketing cost reduction of $7.0 M noted.
• General & administrative expenses unchanged at $10.8 M.

• Cash dividend: $0.480 per share declared September 2, 2025.

• Year‑to‑Date (YTD) 2025 vs. YTD 2024

• Total revenue: $201.1 M (+$2.0 M).
• System Sales: $1.329 B (+3.6%).
• Adjusted EBITDA: $70.7 M (+$5.2 M).

• Net income: $39.3 M vs. $22.8 M YoY; net income per share $1.59 vs. $1.51.

• Operational Metrics

• Opened 3 new A&W restaurants in Q3 2025 (seven fewer than the prior year quarter).
• Net annual restaurant unit growth: +1.4% YoY.

• Service fee rate migration from 2.5% to 3.5% increased weighted‑average fee margin.

• Transaction Impact

• October 17, 2024 acquisition of A&W Revenue Royalties Income Fund eliminated royalty expense and associated income/expense items, making Q3 2025 results not directly comparable with Q3 2024.

• Guidance & Outlook (FY 2025)

• Adjusted EBITDA: $96–$101 M (vs. $93.5 M FY 2024).
• Total A&W restaurants: 1,085–1,100 (up from 1,073).
• Annual System Sales Growth: 1.5%–4.5% (vs. 0.8%).

• Annual Same‑Store Sales Growth: 0.0%–3.0% (vs. –0.6%).

• Conference Call

• Date/Time: Friday, October 17, 2025 at 1:00 p.m. PT / 4:00 p.m. ET.
• Access via https://events.q4inc.com/attendee/798309984 (registration required).

Notable Quotes

• “We are pleased to report our third consecutive quarter of positive Same Store Sales Growth, a significant achievement amidst a challenging macro‑economic environment…” – Susan Senecal, CEO.

Materiality: Material – Positive (the results materially improve earnings and reaffirm guidance).