KFC drives Restaurant Brands' sales boost

Restaurant Brands is reporting second quarter sales across its three New Zealand businesses up 5.8 per cent to $93.6 million, with same store sales up 5 per cent.

The higher sales continued to be driven by solid growth in the KFC business, up 11.7 per cent for the 16 weeks ended September 10, compared to the second quarter a year earlier, Restaurant Brands said today.

The KFC brand continued to build on the momentum of its transformation process.

Starbucks Coffee was up a steady 6.7 per cent for the second quarter from a year earlier, while Pizza Hut began to improve but still produced an overall sales decline of 7.5 per cent, the company said.

On a year-to-date basis total sales at $164.1m were up 5.1 per cent on the first half of last year and showed an overall 4.7 per cent same store growth.

Last Friday the company announced the name of its new chief executive, following the resignation of former boss Vicki Salmon in March.

At the time of Ms Salmon's departure, chairman Ted van Arkel had said it was time for some new blood to come into the organisation.

In the end the company chose to appoint from within, giving the top job to acting chief executive Russel Creedy, after what Mr van Arkel described as an extensive global search.

Today the company said sales at KFC were up $6.3m in the second quarter to $60.7m.

With two stores closed or partially closed over the period for major refurbishment, the level of sales growth was "very satisfactory", Restaurant Brands said.

KFC was now into its third consecutive year of quarter on quarter sales growth, underlining the growing strength of the brand and the continued sustainability of the store transformation process.

On a same store basis KFC sales were up 9.3 per cent for the quarter.

Year-to-date KFC sales increased $10.3m on the year before to a new high of $106.2m, up 10.8 per cent in total and 9.9 per cent on a same store basis.

Total sales at Pizza Hut New Zealand during the second quarter were $23.1m, with same store sales declining 4 per cent.

That was a substantial improvement on the 8 per cent decline in same store sales in the first quarter of the year. Same store sales growth was not expected until the end of the financial year.

Year-to-date, Pizza Hut sales were $40.5 million, down 8.2 per cent on the prior year and 5.7 per cent on a same store basis.

A new marketing campaign, pricing simplification and new product releases , together with an increased focus on in-store operating performance had helped arrest the sales decline, Restaurant Brands said.

Store numbers were down to 100 at the end of the quarter , with the closure of three red roof stores. Two more red roofs would be closed by the end of the year as part of rationalising the restaurant network.

Starbucks Coffee delivered the 15th consecutive quarter of sales growth, increasing to $9.9m, with same store growth of 2.8 per cent.

For the half year, Starbucks sales increased by $1.2m, or 7.2 per cent, to $17.4m. On a same store basis sales were up 2.5 per cent for the half.

Store numbers remained at 46 compared to 45 at the same period last year.

The progressive withdrawal from the Pizza Hut Victoria investment continued with six more stores being sold to individual owners, the company said.

At quarter end, 11 stores remained from the original 50, down from 17 at the end of the first quarter.

Of the remaining stores, one had subsequently settled, with four being subject to sale & purchase agreements and expected to be transferred to the new owners in the next few months.

During the quarter, total sales for the Victorian business were $A2m ($NZ2.4m), down 74 per cent on a year earlier with store disposals. Year-to-date sales were down 69 per cent to $A4.1m.

Restaurant Brands shares closed at 86c yesterday, having ranged between $1.18 and 80c in the past year.