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Restaurant Brands New Zealand looking to boost sales

Restaurant Brands New Zealand (ASX:RBD) is looking to boost annual sales to the $NZ1.3 billion mark by the end of this year after revealing a solid but unspectacular performance in the third quarter.

Sales in Australia and New Zealand remained strong in the quarter but weakened noticeably in California.

RBD operates the New Zealand outlets of KFC, Pizza Hut, and Carl’s Jr., together with KFC in Australia, KFC in California, and Pizza Hut and Taco Bell in Hawaii, Guam, and Saipan. Collins Food is the rival in Australia with its KFC and Taco Bell chains.

The company lifted sales in the three months to September by 5.8% to $NZ340.9 million, which the fast-food group said “reflects ongoing recovery from the impacts of the 2022 COVID-19 Omicron outbreak and the price increases that were implemented across all markets.”

That saw year-to-date sales for the first 9 months of the year rise a solid 8.2% to $NZ981.1 million, putting it on track to reach the $NZ1.3 billion or higher level because of the approaching long holiday summer break in its key New Zealand and Australian markets.

Sales were boosted “by the net inclusion of 5 new stores (to 377 stores in total) and the strengthening US dollar since the equivalent period last year,” RBD said.

Third-quarter sales in New Zealand were up 7.6% (on a headline basis) and 5% on a same-store basis to $NZ148.0 million, “largely driven by price increases and the easing of pandemic-related trading constraints.”

Total year-to-date NZ sales rose 8% to $NZ420.4 million (and up 5.6% on a same-store basis). Store numbers increased by two to 145 stores during the quarter with the opening of a Carl’s Jr. in Hamilton and a Taco Bell in Otahuhu.

In addition to the 145 company-owned stores, the business has 114 Pizza Hut stores run by independent franchisees (an increase of six stores from December 2022).

In Australia, third-quarter sales rose 13% to $A74.1 million ($NZ80.1 million). Same-store sales were up 8.0% (local currency). Store numbers remained steady at 85 in Australia, and year-to-date sales jumped 13.8% to $A214.3 million ($NZ232.0 million) and a solid 9.1% on a same-store basis.

Across the Pacific and Hawaiian sales edged up 0.9% to $US40.3 million ($NZ66.6 million), but were up 5.7% on a same-store basis (because of the stronger US dollar).

Total year-to-date sales were $US119.6 million ($NZ193.6 million), an increase of 3.1% on a total basis and 3.7% on a same-store basis.

Store numbers fell by two during the quarter to 71 stores with the loss of the Pizza Hut and Taco Bell stores in Lahaina during the large fire. These stores were fully insured and are planned to be rebuilt in 2024, RBD said.

Sales in California in the third quarter were $US27.9 million ($NZ46.2 million), down 1.8% on a total basis and 3.3% on a same-store basis (local currency).

Same-store sales have reduced on the prior year largely due to customers shifting to value-oriented menu and promotional items.

Total year-to-date sales were $US83.4 million ($NZ135.1 million), down 1.0% on a total basis and 3.6% on a same-store basis.

Store numbers remained constant at 76 stores during the quarter.

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