VANCOUVER, BC, March 5, 2026 /CNW/ - A&W Food Services of Canada Inc. (TSX: AW) ("A&W", "Food Services", "we" or "our") today announced its financial results for the 16 and 52-week periods ended December 28, 2025 and provided an outlook for fiscal 2026.
All references to "Q4 2025" are to Food Services' 16-week period ended December 28, 2025, to "Fiscal 2025" are to Food Services' 52-week period ended December 28, 2025, to "Q4 2024" are to Food Services' 16-week period ended December 29, 2024 and to "Fiscal 2024" are to Food Services' 52-week period ended December 29, 2024.
"In Fiscal 2025 we were able to deliver positive Same Store Sales Growth in all four quarters, open 26 new A&W restaurants and meet our annual guidance" announced Susan Senecal, Chief Executive Officer. "These are significant achievements given the fiercely competitive landscape and challenging macroeconomic environment that we are operating in. We stay committed to making sure that A&W remains affordable for all Canadians, while maintaining the high-quality and great taste that our brand is known for and are pleased with how our value-based promotions and dedicated value menu contributed to our growth in 2025," added Ms. Senecal. "While the continued economic uncertainty in Canada and the severe weather events in the eastern provinces during early 2026 present headwinds for sales at A&W restaurants in 2026, we are confident in our brand's ability to deliver value to our guests. We are optimistic about our future and believe we can successfully navigate these challenging conditions".
Q4 FINANCIAL HIGHLIGHTS
(as compared to Q4 2024)
-- System Sales(i) of $591.4 million increased by $14.6 million (2.5%)
-- Revenue of $93.0 million was consistent with Q4 2024 revenue of $93.2
million
-- Income before income taxes increased by $2.5 million (12%) to $23.4
million
-- Adjusted EBITDA(i) increased by $1.4 million (5%) to $29.3 million and
Adjusted EBITDA Margin(i) increased 150 bps to 31.5% from 30.0%
-- General and administrative expenses increased by $1.9 million (12%) to
$16.9 million, primarily due to differences in the timing of when
expenses were incurred
-- Cash Dividend of $0.480 per share was declared on December 1, 2025
-- Opened 12 new A&W restaurants
FISCAL 2025 FINANCIAL HIGHLIGHTS
(as compared to Fiscal 2024)
-- System Sales(i) increased by $51.8 million (2.8%) to $1.92 billion
-- Revenue increased by $1.8 million (1%) to $294.1 million
-- Income before income taxes increased by $26.7 million (53%) to $76.7
million
-- Adjusted EBITDA(i) increased by $6.6 million (7%) to $100.0 million and
Adjusted EBITDA Margin(i) increased 200 bps to 34.0% from 32.0%
-- General and administrative expenses increased by $1.1 million (2%) to
$49.7 million, in line with the increase in Canada's Consumer Price Index
in 2025 of 2.1%(ii)
-- Cash Dividends totalling $1.92 per share were declared
-- Opened 26 new A&W restaurants and achieved net annual restaurant unit
growth of 2.0%, compared to 1.8% in Fiscal 2024
(i) System Sales, Adjusted EBITDA and Adjusted EBITDA
Margin are non-IFRS financial measures and non-IFRS
ratios. Please see the "Non-IFRS Measures" section
of this news release for further details.
SUMMARY OF RESULTS
(in thousands of Q42025 Q42024 Fiscal2025 Fiscal2024
Canadian $)
Financial Summary
Revenue from
franchising 85,465 85,633 269,680 267,619
Revenue from corporate
restaurants 7,515 7,563 24,415 24,680
Total revenue 92,980 93,196 294,095 292,299
Operating costs (48,798) (49,015) (150,538) (157,095)
General and
administrative
expenses (16,935) (15,054) (49,731) (48,632)
Royalty expense - (5,776) - (44,036)
Recovery of impairment
(impairment) of
leases receivable 34 (192) 34 (192)
Net finance expense (4,725) (3,837) (15,874) (4,904)
Gain (loss) on
interest rate swap 859 - (1,318) -
Amortization of
deferred gain - 398 - 3,039
Share of income from
associates - 1,242 - 9,472
Income before income
taxes 23,415 20,962 76,668 49,951
Income tax expense(i) (5,922) (22,075) (19,834) (28,273)
Net income (loss)(i) 17,493 (1,113) 56,834 21,678
Net cash generated
from operating
activities 34,495 8,479 56,997 61,228
Other Metrics
System Sales(ii) 591,421 576,796 1,920,243 1,868,478
System Sales
Growth(ii) 2.5 % -0.1 % 2.8 % 0.8 %
Same Store Sales
Growth(ii) 0.9 % -1.9 % 1.2 % -0.6 %
Number of A&W
restaurants 1,094 1,073 1,094 1,073
Net annual restaurant
unit growth(iii) 2.0 % 1.8 % 2.0 % 1.8 %
Adjusted EBITDA(ii) 29,325 27,927 100,037 93,469
Adjusted EBITDA
Margin(ii) 31.5 % 30.0 % 34.0 % 32.0 %
(i) The income tax expense and net income (loss) for Q4
2024 and Fiscal 2024 includes a non-recurring, non-cash
deferred tax expense of $16.9 million as a result
of the Transaction. Please see the "Income taxes"
sections of Food Services' Fiscal 2025 MD&A under
the header "Results of Operations" for additional
details.
(ii) System Sales, System Sales Growth, Same Store Sales
Growth, Adjusted EBITDA, Adjusted EBITDA Margin are
non-IFRS financial measures, non-IFRS ratios and supplementary
financial measures. Please see the "Non-IFRS Measures"
section of this news release for further details.
(iii) Net annual restaurant unit growth reflects the percent
increase in A&W restaurants at the end of the reporting
period as compared to the end of the prior year comparable
reporting period on a trailing 4 quarter basis.
On October 17, 2024, A&W completed a transaction (the "Transaction") in which Food Services indirectly acquired the trademarks used in the A&W business in Canada through the acquisition of all of the units of A&W Revenue Royalties Income Fund (the "Fund") which it did not already own. Due to the Transaction, the financial results for Q4 2025 are not directly comparable to the financial results for Q4 2024.
For further information regarding the Transaction, please refer to Food Services' Management's Discussion and Analysis ("MD&A") for Fiscal 2025, which is available on Food Services' SEDAR+ profile at www.sedarplus.ca.
Q4 2025 Results Compared to Q4 2024
Total revenue of $93.0 million was consistent with Q4 2024's total revenue of $93.2 million. Higher System Sales and more A&W restaurant openings increased franchising revenue. The three additional restaurant openings in Q4 2025 contributed additional revenue from equipment sales and turnkey restaurants. Those increases to revenue were offset by advertising fund contributions which were $2.0 million lower in Q4 2025, in comparison to Q4 2024, due to a lower contribution rate for certain regional advertising funds, as these rates are determined annually by the regional associations, as well as timing differences related to the sale of coupons on other promotional materials that are administered by the National Advertising Fund.
System Sales(i) increased 2.5% in Q4 2025 (-0.1% in Q4 2024) due to an increase in the number of A&W restaurants and the 0.9% Same Store Sales Growth(i) achieved in Q4 2025. Revenue from service fees and revenue generated from the distribution of food and supplies fluctuate with the movement in System Sales and as such, were up quarter over quarter.
Same Store Sales Growth(i) for Q4 2025 was 0.9%, due to an increase in the average cheque size and growth in guest counts. The growth in guest counts demonstrates the ongoing success of our marketing campaigns, which we began to see positive impacts from in Q1 2025 and reflects the attractiveness of our value offerings in the current consumer market, including our Value Deals menu, which was introduced in Q3 2025 and features a variety of menu items priced under $4.00. The increase in average cheque size is partially attributed to industry-wide inflation affecting goods, services, and labour. Same Store Sales Growth is impacted by shifts in guest counts, cheque size (including party size, menu prices, and menu mix), and changes in consumer discretionary spending.
Income before income taxes increased by $2.5 million in Q4 2025 largely as a result of the cessation of the royalty expense following the completion of the Transaction and gain on the interest rate swap, partially offset by an increase in general and administration expenses, an increase in net finance expense and the cessation of both the income from associates and amortization of deferred gain following completion of the Transaction. The increase in general and administration expenses is driven by timing differences between when certain costs were incurred in Fiscal 2025 versus Fiscal 2024, an increase in professional fees as well as the introduction of stock-based compensation in Fiscal 2025, which accounted for $0.7 million of the quarter over quarter increase. In Q4 2025 the advertising funds had a positive impact to net income before taxes of $0.6 million whereas in Q4 2024, the positive impact to net income before taxes attributable to the advertising funds was $2.4 million, resulting in a $1.8 million quarter over quarter variance in net income before taxes that is due to the timing of expenses incurred by the advertising funds.
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