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Mty Food Group (MTYFF)
:MTYFF

MTY Food Group (MTYFF) AI Stock Analysis

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MTY Food Group (MTYFF) vs. SPDR S&P 500 ETF (SPY)

MTY Food Group Business Overview & Revenue Model

Company DescriptionMTY Food Group Inc. franchises and operates quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and internationally. The company also sells retail products under a multitude of banners. As of November 30, 2021, the company had 6,719 locations comprising 6,603 franchised, 23 joint ventures, and 93 corporate locations. The company was formerly known as iNsu Innovations Group Inc. and changed its name to MTY Food Group Inc. in July 2003. MTY Food Group Inc. was founded in 1979 and is headquartered in Saint-Laurent, Canada.
How the Company Makes Money

MTY Food Group Earnings Call Summary

Earnings Call Date:Apr 11, 2025
(Q1-2025)
|
% Change Since: 8.86%|
Next Earnings Date:Jul 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlights MTY's resilience and strong cash flow generation despite weather and economic challenges. Digital sales and a strong new store pipeline are positive indicators, but net store closures and foreign exchange impacts on earnings present challenges.
Q1-2025 Updates
Positive Updates
Resilient Performance in Challenging Conditions
Despite extreme weather disruptions, same-store sales remained largely stable, demonstrating resilience against macroeconomic headwinds.
Strong Digital Sales Growth
Digital sales increased by 7% in the first quarter, representing 22% of total sales, reflecting ongoing investments and brand-level initiatives.
Robust Cash Flow Generation
Cash flows from operating activities were $58.5 million, up 9% year-over-year, and free cash flows net of lease payments increased by 18%.
Strong New Store Pipeline
MTY opened 70 locations with over 100 locations under construction, indicating a strong pipeline and anticipated improvement in restaurant openings.
Shareholder Returns through Buybacks and Dividends
Repurchased just under 300,000 shares and paid $7.7 million in dividends, indicating continued commitment to returning value to shareholders.
Negative Updates
Net Decrease in Locations
Closed 102 locations resulting in a net decrease of 32, with closures particularly affecting the QSR Frozen Treats segment.
Challenges in Canadian and U.S. Operations
Canadian revenues dipped by 2% and U.S. organic system sales decreased by 3.1%, affected by macroeconomic headwinds and weather disruptions.
Impact of Foreign Exchange on Earnings
Income attributable to owners declined to $1.7 million due to foreign exchange variations on intercompany loans, affecting adjusted EPS.
Company Guidance
During the MTY Food Group 2025 first-quarter earnings call, the company provided guidance reflecting a resilient performance amid challenging macroeconomic conditions. Same-store sales remained stable after adjusting for a leap year impact, despite extreme weather causing temporary store closures. Digital sales increased by 7%, making up 22% of total sales, highlighting MTY's investments in enhancing off-premise customer experiences. The company opened 70 locations and closed 102, resulting in a net decrease of 32 locations, with a strong pipeline of over 100 locations under construction for future growth. MTY reported a modest increase in normalized adjusted EBITDA to $60.2 million, with system sales growing by 2.5% year-over-year. Free cash flow net of lease payments rose by 18% to $43.5 million, representing 72% of normalized adjusted EBITDA, underscoring strong cash flow generation. The company repurchased nearly 300,000 shares and maintained a focus on strategic acquisitions while returning value to shareholders through dividends and buybacks.

MTY Food Group Financial Statement Overview

Summary
MTY Food Group demonstrates strong operational efficiency, with healthy EBIT and EBITDA margins. However, the decline in net profit margin and revenue growth raises concerns. The high debt-to-equity ratio suggests significant leverage, though cash flow metrics reveal solid cash generation capabilities. Overall, the company exhibits potential for growth but faces challenges in managing financial leverage and improving revenue.
Income Statement
75
Positive
The income statement shows a stable gross profit margin at 33.53% TTM, with an EBIT margin of 23.58% indicating strong operational efficiency. However, the net profit margin decreased to 2.08% TTM, reflecting potential issues in managing non-operational costs. Revenue growth is declining, with a decrease from the previous year, which is a concern.
Balance Sheet
70
Positive
The balance sheet reflects a high debt-to-equity ratio of 1.52, which indicates significant leverage and potential financial risk. However, the equity ratio is stable at 31.01%, suggesting a reasonable balance between equity and assets. ROE stands at 3.01% TTM, showing limited efficiency in generating returns from equity.
Cash Flow
80
Positive
The cash flow statement highlights a strong operating cash flow to net income ratio of 8.48, indicating robust cash generation relative to net income. Free cash flow grew by 16.42% over the previous year, suggesting effective capital management. However, free cash flow to net income is high, indicating reliance on cash flow to sustain net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.17B1.16B1.17B716.52M551.90M511.12M
Gross Profit
427.90M419.18M340.98M255.40M300.62M276.61M
EBIT
306.65M171.22M181.25M133.58M124.17M81.83M
EBITDA
150.15M165.34M263.02M165.60M169.80M14.65M
Net Income Common Stockholders
8.61M24.17M104.08M74.82M85.64M-36.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
68.78M50.41M58.90M59.48M61.23M44.30M
Total Assets
2.62B2.59B2.68B2.33B1.90B2.01B
Total Debt
1.22B1.22B1.30B1.08B834.28M1.02B
Net Debt
1.15B1.17B1.24B1.02B773.04M974.99M
Total Liabilities
1.80B1.78B1.87B1.60B1.26B1.43B
Stockholders Equity
816.90M801.84M811.41M723.41M647.64M581.75M
Cash FlowFree Cash Flow
184.82M177.08M152.42M130.14M132.54M128.03M
Operating Cash Flow
209.43M204.81M184.59M142.80M139.30M133.65M
Investing Cash Flow
-20.02M-23.54M-319.66M-258.42M7.20M-12.11M
Financing Cash Flow
-173.07M-186.78M135.94M105.30M-129.58M-126.37M

MTY Food Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$691.72M130.101.11%2.89%
62
Neutral
$6.88B11.322.90%3.87%2.70%-24.57%
$360.68M16.0710.29%6.16%
TSODD
49
Neutral
C$23.62M
-6.91%31.42%
TSAEG
C$31.13M6.54%
C$121.30K
46
Neutral
C$13.74M11.42%-13.66%-25.60%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MTYFF
MTY Food Group
30.24
-2.57
-7.83%
PZRIF
Pizza Pizza Royalty
10.85
1.88
20.96%
TSE:ODD
Odd Burger Corporation
0.24
0.07
41.18%
TSE:AEG
Aegis Brands
0.36
0.00
0.00%
TSE:JIVA
PlantX Life Inc.
0.10
-0.90
-90.00%
TSE:FOOD
Goodfood Market Corp
0.14
-0.16
-53.33%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.