Pizza Pizza Royalty (PZA) Q2 2025 earnings summary

Executive summary

• Same store sales grew 2.1% in Q2 2025, reversing prior declines, with combined in-store sales up due to increased customer traffic and higher average check sizes at both brands.

• Royalty Pool System Sales rose 3.9% to CAD 161.4 million in Q2, with year-to-date growth of 2.8%.

• Marketing initiatives, new product launches, and digital engagement contributed to higher organic delivery and brand engagement.

• Restaurant network expanded by 3 net locations year-to-date, ending Q2 with 800 locations in Canada and continued expansion in Mexico.

• Adjusted EPS increased 1.3% to $0.241 in Q2.

Financial highlights

• Royalty income increased 3.8% to CAD 10.3 million for Q2; six-month royalty income reached $20.1 million.

• Dividends declared totaled CAD 5.7 million (CAD 0.2325/share) in Q2, with payout ratio at 108%.

• Working capital reserve at quarter-end was CAD 4.8 million, down $1.3 million during the period.

• Adjusted earnings available for shareholder dividends were $5.3 million in Q2.

• Payout ratio was 108% in Q2 and 112% for the six months.

Outlook and guidance

• Anticipates 2%-3% traditional restaurant network growth for the remainder of 2025, with continued renovations and some caution due to tariff and construction cost uncertainties.

• Macro-economic headwinds and consumer spending softness expected to persist; focus remains on value messaging and digital investments.

• Dividend policy aims for consistent monthly distributions, funded by operations and cash reserves.