MTY Food Group says it will close 68 underperforming restaurants over the next six to nine months after reporting a decline in quarterly sales and profit.
The Montreal-based company, which owns brands including Thai Express, Mr. Sub and Manchu Wok, announced the closures alongside its second-quarter financial results on Friday.
Chief executive Eric Lefebvre said the affected restaurants lost more than $10 million over the past year and were identified following a review of the company’s operations.
“This is an important step for MTY,” Lefebvre told analysts during a conference call, according to The Gazette.
“The decision will reduce our store count in the near term, but we believe it is the right long-term action for the business.”
Lefebvre said around 45 to 50 of the planned closures involve Papa Murphy’s, the US-based take-and-bake pizza chain owned by MTY. Some locations could shut as early as next week.
The company reported net income of $15.4 million for the quarter ending 31 May, down from $57.3 million a year earlier.
Revenue fell to $279.9 million from $304.9 million, while same-store sales dropped 2.1 per cent.
According to The Gazette, MTY attributed the weaker performance to continued pressure on consumer spending and challenging market conditions.
The company expects the closures and lease terminations to cost between $10 million and $12 million.
MTY operates more than 7,000 restaurants under more than 80 brands across Canada, the United States and other international markets.
