MTY Food Group (MTY) Q2 2026 earnings summary

Executive summary

• Q2 2026 was challenging, with continued consumer confidence issues, negative same-store sales, and segment profits of $59.9 million, down $9.4 million year-over-year, though sequential improvement was noted over Q1.

• Same-store sales declined 2.2% in the U.S., 1.8% in Canada, and 5.2% internationally, but Canadian trends turned positive in June for most concepts.

• Net income attributable to owners was $15.4 million ($0.67 per diluted share), down from $57.3 million ($2.49 per share), impacted by impairments and a $42.7 million negative FX variance.

• Free cash flows net of lease repayments rose to $32.2 million ($1.41 per diluted share), supported by an asset-light, diversified portfolio.

• Decisive action taken to close 68 underperforming corporate-owned stores, incurring a $7.5 million impairment charge, to improve long-term profitability.

Financial highlights

• Revenue for Q2 2026 was $279.9 million, down 8.2% year-over-year, mainly due to lower corporate store revenue and FX impacts.

• Normalized adjusted EBITDA was $60.2 million, down $9.8 million year-over-year, mainly due to reduced profitability in U.S. and international corporate operations and lower franchising contributions.

• Franchise segment profit was $50.6 million, down 5% year-over-year; franchise revenues were $98.6 million, down from $102.8 million.

• Corporate segment profit and adjusted EBITDA were each $5.7 million, down from $11.3 million; corporate revenues fell 15% to $111.7 million.

• System sales were $1.4 billion, down 3.5% year-over-year; organic system sales decreased 1.7% excluding FX.

Outlook and guidance

• Expect acceleration in new store openings in the second half of 2026, with a robust development pipeline and strong demand from franchise operators.

• Store closures to be completed over six to nine months, with most closures weighted toward Q3 and total closure costs of $10–12 million.

• Excluding the 68 planned closures, net store growth is expected to be positive for the year; including closures, net store count will likely be negative.

• CapEx guidance remains at similar levels to last year, with no major new build commitments.

• Management expects stability in normalized adjusted EBITDA margins, with some fluctuations in corporate store margins.