MTY Reports Third Quarter Results for Fiscal 2025

Executive Summary

• MTY Food Group reported Q3 2025 revenue of $297.0 M, a modest 1% increase YoY, but net income fell 20% to $27.9 M ($1.22 per diluted share).
• Normalized adjusted EBITDA rose 3% YoY to $74.0 M, driven largely by a $5.8 M Employee Retention Credit; excluding the credit, EBITDA would have declined.
• The company declared a quarterly dividend of $0.33 per common share and repaid $30.4 M of long‑term debt during the quarter.

Key Details

• Financial Highlights (in $ thousands)
• Revenue: $296,989 vs. $292,753 YoY
• Adjusted EBITDA: $73,204 vs. $71,781 YoY
• Normalized adjusted EBITDA: $73,964 vs. $71,895 YoY
• Net income attributable to owners: $27,875 vs. $34,886 YoY
• Cash flow from operations: $39,009 vs. $66,355 YoY (down $27.4 M)

• Free cash flow net of lease payments: $25,819 vs. $49,271 YoY

• Segment Performance

• Franchise segment revenue –2%; normalized adjusted EBITDA $56.0 M (‑2% YoY).
• Corporate segment revenue –2%; normalized adjusted EBITDA $13.1 M (+$3.8 M YoY) due to ERC.

• Food processing, distribution & retail revenue +18%; normalized adjusted EBITDA $4.9 M (down from $5.2 M YoY).

• Store Network

• Total locations: 7,061 (6,805 franchised, 256 corporate).

• Net store openings: +15 (96 opened, 81 closed) versus a net closure of –41 in Q3‑2024.

• System Sales & Same‑store Sales

• System sales: $1.455 B (down modestly YoY).
• Same‑store sales: down 1.6% YoY (Canada ‑0.3%, US ‑2.5%, International +0.8%).

• Digital sales: $273.4 M, up 1% YoY; Canadian digital sales grew 8%.

• Liquidity & Capital Resources

• Cash on hand: $37.1 M; long‑term debt: $638.9 M (primarily bank facilities and acquisition notes).

• Revolving credit facility: $900 M authorized; $534 M drawn (CAD 253 M + US 281 M).

• Dividends & Debt Repayment

• Quarterly dividend declared: $0.33 per share, payable Nov 14 2025.

• Long‑term debt repaid: $30.4 M during the quarter.

• Outlook & Risks

• Management expects continued macro‑economic headwinds but anticipates improved store opening pace and stable normalized adjusted EBITDA margins.
• Potential risks include U.S. government shutdown affecting SBA loan availability and SNAP benefit disruptions impacting discretionary spending.

Notable Quotes

“While Q3 reflected ongoing macroeconomic volatility, we are encouraged by the sequential improvement at some of our larger banners… These results support our confidence in the resilience of our brands.” – Eric Lefebvre, CEO