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MTY Food Group (TSE:MTY)
TSX:MTY
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MTY Food Group
(TSX:MTY)68Neutral
MTY Food Group (MTY) vs. S&P 500 (SPY)
Market Cap
$1.02B
Dividend Yield2.72%
Average Volume (3M)73.67K
Price to Earnings (P/E)43.7
Beta (1Y)0.91
Revenue Growth-0.83%
EPS Growth-77.91%
CountryCA
Employees7,326
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)0.94
Shares Outstanding23,192,862
10 Day Avg. Volume91,372
30 Day Avg. Volume73,670
Financial Highlights & Ratios
PEG Ratio4.43
Price to Book (P/B)N/A
Price to Sales (P/S)0.91
Price to Cash Flow (P/CF)6.00
P/FCF Ratio5.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$52.92Price Target Upside20.02% Upside
Rating ConsensusHold
Number of Analyst Covering2
MTY Food Group Business Overview & Revenue Model
Company DescriptionMTY Food Group, Inc. engages in the franchise and operation of quick-service and causal dining restaurants. It operates through the Canada, and USA and International segments. The firm's brands include, but not limited to Au Vieux Duluth Express, Chick 'n' Chick, Cultures, Franx Supreme, Koryo Korea, Koya Japan, Burger, Panini, TacoTime, Tandori Cuisine Indienne, TiKi-MiNG, TuTTi FRUTTi, View&nam, Villa Madina Mediterranean Cuisine, Country style, Croissant Plus, JUGO JUICE, KiMoCHi, Sub, Buns Master, La Crémière, Sukiyaki, Sushi shop, TCBY Canada, and Thai Express, Valentine. The company was founded by Stanley Ma in 1979 and is headquartered in Saint-Laurent, Canada.
How the Company Makes MoneyMTY Food Group primarily makes money through franchise fees and royalties collected from its franchisees. The company generates revenue by charging initial franchise fees to new restaurant owners and ongoing royalties based on a percentage of each franchise's sales. Additionally, MTY benefits from supply chain agreements, where it may receive income from distributing food and other products to its franchise locations. The company's growth is bolstered by strategic acquisitions, expanding its brand portfolio and increasing market presence, and by maintaining strong relationships with franchisees to ensure brand consistency and customer satisfaction.
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
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.75
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.16B | 1.17B | 716.52M | 551.90M | 511.12M | Gross Profit |
| 419.18M | 340.98M | 255.40M | 300.62M | 276.61M | EBIT |
| 0.00 | 181.25M | 133.58M | 124.17M | 81.83M | EBITDA |
| 165.34M | 263.02M | 165.60M | 169.80M | 14.65M | Net Income Common Stockholders |
| 24.17M | 104.08M | 74.82M | 85.64M | -36.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 50.41M | 58.90M | 59.48M | 61.23M | 44.30M | Total Assets |
| 2.59B | 2.68B | 2.33B | 1.90B | 2.01B | Total Debt |
| 1.22B | 1.30B | 1.08B | 834.28M | 1.02B | Net Debt |
| 1.17B | 1.24B | 1.02B | 773.04M | 974.99M | Total Liabilities |
| 1.78B | 1.87B | 1.60B | 1.26B | 1.43B | Stockholders Equity |
| 801.84M | 811.41M | 723.41M | 647.64M | 581.75M |
| Cash Flow | Free Cash Flow | |||
| 177.08M | 152.42M | 130.14M | 132.54M | 128.03M | Operating Cash Flow |
| 204.81M | 184.59M | 142.80M | 139.30M | 133.65M | Investing Cash Flow |
| -23.54M | -319.66M | -258.42M | 7.20M | -12.11M | Financing Cash Flow |
| -186.78M | 135.94M | 105.30M | -129.58M | -126.37M |
MTY Food Group Technical Analysis
Negative
44.09
Price Trends
46.74
Negative
46.55
Negative
45.22
Negative
Market Momentum
-1.09
Positive
45.86
Neutral
70.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MTY, the sentiment is Negative. The current price of 44.09 is below the 20-day moving average (MA) of 45.89, below the 50-day MA of 46.74, and below the 200-day MA of 45.22, indicating a bearish trend. The MACD of -1.09 indicates Positive momentum. The RSI at 45.86 is Neutral, neither overbought nor oversold. The STOCH value of 70.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MTY.
MTY Food Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Performance Comparison
TSE:MTY
MTY Food Group
44.96
-5.81
-11.44%
QSR
Restaurant Brands International
69.57
-8.16
-10.50%
PZRIF
Pizza Pizza Royalty
9.64
-0.14
-1.43%
TSE:BPF.UN
Boston Pizza Fund
17.03
2.58
17.85%
TSE:KEG.UN
Keg Royalties Fund
13.98
-0.02
-0.14%
MTY Food Group Earnings Call Summary
Earnings Call Date: Feb 14, 2025 | % Change Since: -11.89% | Next Earnings Date: Apr 4, 2025
Earnings Call Sentiment Neutral
MTY Food Group showed resilience with strong shareholder returns, positive location growth, and digital sales expansion, despite challenges in corporate segments, retail distribution, and significant impairment charges. The overall sentiment of the call is mixed, reflecting both notable achievements and considerable challenges.Highlights
Record Shareholder Returns
MTY returned a record amount to shareholders through share buybacks and dividend payments totaling over $68.6 million.
Net Positive Location Growth
For the first time in 10 years, MTY achieved net positive location growth in the fourth quarter with a net addition of 13 restaurants.
Strong Digital Sales Growth
Digital sales grew 9% year-over-year to $1.1 billion, now representing 20% of MTY's total sales.
Healthy Balance Sheet
MTY paid back over $79.5 million of its long-term debt, reducing net debt by over $52 million compared to the end of 2023.
Lowlights
Decreased Normalized Adjusted EBITDA
Normalized adjusted EBITDA totaled $59.4 million, a decrease of 1.6% from the previous year.
Corporate Restaurant Segment Challenges
The corporate restaurant segment saw a 39% drop in EBITDA due to top-line sales decreases in concepts like Barrio Queen and Granite City.
Retail Distribution Struggles
Retail distribution concluded a difficult fiscal year with a 12% decrease compared to prior year, affected by a shift to discount brands and house labels.
Significant Impairment Charges
A $64.6 million non-cash impairment charge was recorded on certain tangible and intangible assets, and a goodwill impairment charge on the Papa Murphy's brand due to lower than expected performance.
Net Loss Attributable to Owners
The company reported a net loss attributable to owners of $55.3 million during the fourth quarter, influenced by impairment charges and foreign exchange rate fluctuations.
Company Guidance
During the MTY Food Group's Fiscal Year 2024 Fourth Quarter earnings call, the company reported several key financial metrics. Free cash flows net of rent payments were $5.75 per share, totaling $137.9 million, with $68.6 million returned to shareholders via share buybacks and dividends. MTY managed to pay down $79.5 million of long-term debt, resulting in a healthier balance sheet. Notably, MTY achieved a net positive location growth for the first time in a decade, adding 13 net new restaurants in the quarter. System sales were steady at over $5.6 billion, with sequential improvements from -2% in Q1 to +2% in Q4. Digital sales increased by 9% year-over-year, reaching $1.1 billion, now representing 20% of total sales. The company ended the year with 7,079 locations, predominantly franchised, and a net debt of $656 million, indicating a debt-to-EBITDA ratio of approximately 2.5 times. Despite a net accounting loss of $55.3 million in Q4 due to impairment charges and foreign exchange variations, MTY's financial health was underscored by strong cash flow metrics, including $11 per share in normalized adjusted EBITDA for the year.MTY Food Group Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
MTY Food Group Reports Stable Q4 2024 Amid Expansion
Neutral
Feb 14, 2025
MTY Food Group reported stable financial performance in Q4 2024, with normalized adjusted EBITDA remaining relatively steady at $59.4 million and system sales increasing by 2% due to organic growth. The company opened 13 new locations, emphasizing the strength of its franchising segment with an 8% increase in normalized adjusted EBITDA. Despite these positive trends, MTY experienced a net loss attributable to owners of $55.3 million, contrasting with a profit in the same quarter of the previous year. Key activities included repurchasing shares and making debt repayments, indicating ongoing efforts to manage financial obligations and shareholder value.
Business Operations and StrategyFinancial Disclosures
MTY Food Group Schedules Q4 Results Conference Call
Neutral
Feb 7, 2025
MTY Food Group Inc announced that it will hold a conference call on February 14, 2025, to discuss its fourth-quarter results. This call is open to analysts, investors, and interested parties, providing a platform for stakeholders to gain insights into the company’s financial performance and strategic direction.
DividendsBusiness Operations and Strategy
MTY Food Group Increases Quarterly Dividend by 18%
Positive
Jan 22, 2025
MTY Food Group has announced an 18% increase in its quarterly dividend to 33.0¢ per share, reflecting its strong financial position and commitment to shareholder value. This marks the twelfth increase since its initial dividend declaration in 2010, emphasizing the company’s strategic growth initiatives and sustainable long-term business model.
MTY Group Foundation’s Successful First Year of Community Support
Jan 13, 2025
In its first year, the MTY Group Foundation successfully raised over $140,000 to support community initiatives, including significant contributions to the Breakfast Club of Canada and The Montreal Children’s Hospital Foundation. Major fundraising events included a golf tournament and the ‘Pedal for Kids’ event, while employees also participated in smaller initiatives, highlighting MTY’s dedication to community engagement and social responsibility.
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.