A & W Food Services of Canada (AW) Q4 2025 earnings summary

Executive summary

• Achieved both top and bottom line growth in 2025 despite challenging economic and competitive conditions in the Canadian QSR burger market, with positive same-store sales growth in all four quarters and annual guidance met.

• Operates 1,094 franchised and 10 corporate restaurants, serving over 125 million guests annually as of December 28, 2025.

• Recognized as the #2 QSR burger chain and #3 restaurant brand in Canada, with a 70-year legacy and multiple awards.

• Opened 26 new restaurants in 2025, focusing on Ontario, Quebec, and Suncor/Petro Canada partnership locations; launched two standalone Pret A Manger sites in Toronto.

• Strategic initiatives included value-based promotions, menu innovation, and digital engagement through the A&W app and loyalty program.

Financial highlights

• Fiscal 2025 system sales reached $1.92 billion, up 2.8% year-over-year; total revenue was $294.1 million, up 1%.

• Adjusted EBITDA for 2025 was $100.0 million, with margin improving to 34.0%; Q4 Adjusted EBITDA rose 5% to $29.3 million.

• Q4 2025 revenue was $93 million, nearly flat year-over-year; Q4 same-store sales grew 0.9%.

• Net income for 2025 was $56.8 million, up from $21.7 million in 2024; income before taxes grew 53% to $76.7 million.

• Cash dividends totaling $1.92 per share declared for 2025; free cash flow was $54.6 million.

Outlook and guidance

• Fiscal 2026 guidance: Adjusted EBITDA of $103–$105 million, system sales growth of 2.5%–5%, same-store sales growth of 0.5%–3%, and restaurant count forecasted at 1,112–1,120.

• Guidance reflects ongoing economic uncertainty, severe weather impacts, trade friction, and demographic shifts, especially in Ontario.

• Committed to maintaining current quarterly dividend level; guidance replaces previous long-term targets.