Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boston Pizza Royalties Income Fund (BPZZF, Financial) maintained stable franchise sales in the third quarter, aligning with previous quarters in 2024.
- Effective promotional campaigns, such as the summer patio campaign and fall-inspired menu, resonated well with guests.
- The Boston Pizza kids cards promotion generated over $1 million for the foundation, marking a 6% increase compared to 2023.
- The fund's net and comprehensive income increased by $4.5 million for the quarter compared to the third quarter of 2023.
- Cash flows generated from operating activities increased by $0.3 million compared to the third quarter of 2023.
Negative Points
- Franchise sales from restaurants in the Royalty Pool decreased by 0.6% for the quarter and 0.1% year-to-date compared to the same periods one year ago.
- Same restaurant sales were negative 0.6% for the quarter, primarily due to macroeconomic challenges.
- No new restaurants were opened during the third quarter, and one restaurant was closed.
- The fund's payout ratio increased to 88.9% for the quarter, up from 82.9% in the third quarter of 2023.
- Distributable cash decreased by $0.2 million or 1.8% for the quarter compared to the same period in 2023.
Q & A Highlights
Q: Can you provide more details on the negative same-store sales growth for the quarter? Was it due to decreased traffic or smaller checks?
A: Jordan Holm, President, Director: The negative same-store sales growth was primarily due to a traffic challenge. Post-COVID, we've had to strategically increase menu prices to offset rising input costs, which has affected visitation. While the average guest check has increased due to these price adjustments, the number of visitors has slightly decreased as guests adjust their budgets due to increased household expenses.
Q: What is the current pipeline for new store openings?
A: Jordan Holm, President, Director: This year, we've opened two locations and have two more under construction, expected to open by year-end, totaling four new restaurants for 2024. We don't provide forecasts for 2025 due to potential delays in permitting and real estate, but we're pleased with the progress and aim to maintain this momentum.
Q: Were there any notable trends during the quarter?
A: Jordan Holm, President, Director: We were pleased with several promotional activities, such as our summer patio campaign and the Kids Eat Free promotion, which raised over $1 million for the Boston Pizza Foundation. Additionally, many restaurants have undergone full renovations, enhancing guest experiences. These efforts helped maintain stable franchise sales levels nationally.
Q: How did the promotional activities impact the quarter's performance?
A: Jordan Holm, President, Director: Promotional activities like the summer patio campaign and Kids Eat Free promotion were successful in engaging guests and maintaining stable sales. The renovations and patio investments also contributed positively, with over 100 restaurants enhancing their outdoor spaces post-COVID.
Q: Are there any specific challenges you foresee in the upcoming quarters?
A: Jordan Holm, President, Director: While inflation and interest rates are declining, we remain cautious due to ongoing macroeconomic challenges in the restaurant industry. However, franchise sales have remained steady, and we are confident in our strategies to mitigate these challenges and maintain positive sales levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
