Americana Restaurants International (AMR) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was $1.0528 billion, down 15.2% year-over-year, with like-for-like sales declining 20.3% due to regional geopolitical conflict, weak consumer demand, and increased competition, partially offset by new store openings.

• Net profit attributable to shareholders was $80 million, a 44.8% decrease year-over-year, impacted by lower sales, higher depreciation from new stores, and margin dilution.

• Adjusted EBITDA reached $232.7 million (22.1% margin), down 20.2% year-over-year, mainly due to negative operating leverage from lower sales.

• 81 new restaurants opened in H1 2024, with 273 gross new stores in the last 12 months and 36 under construction, focusing on less impacted markets.

• Net new store opening guidance for 2024 revised to 175–185, reflecting a cautious expansion pace.

Financial highlights

• Q2 2024 revenue increased 13.3% sequentially from Q1, aided by market recovery and seasonal events.

• Adjusted free cash flow was $44.1 million, a 60.2% decline year-over-year; cash conversion ratio stood at 33.4%.

• CapEx for H1 2024 was $47 million (4.4% of revenue), mainly for new store openings and digital investments.

• Currency fluctuations (notably Egyptian pound, Lebanese lira) negatively impacted revenue by $26 million; store closures contributed a $17 million reduction.

• Gross margin improved year-over-year, driven by lower commodity prices and revenue management, despite value-driven promotions.

Outlook and guidance

• Management expects continued quarter-on-quarter recovery but cannot predict full recovery timing due to ongoing conflict and macro pressures.

• Recovery strategy focuses on value offers, product innovation, and building customer trust to drive transactions.

• Guidance for improved gross margins in 2024 versus 2023, despite value-driven promotions.

• Focus remains on revenue recovery through smart pricing, targeted promotions, and increased marketing investments.

• Continued optimization of store-level and G&A platforms, including sourcing efficiencies.