Pizza Pizza Royalty (PZA) Q4 2024 earnings summary

Executive summary

• Opened 48 new restaurants in 2024, surpassing 800 total locations, with expansion into every Canadian province and Mexico; net network growth of 23 locations.

• Faced industry headwinds from reduced consumer spending, heightened competition, and a Canada Post strike impacting Q4 marketing.

• Same-store sales declined 3.9% in Q4; Pizza Pizza down 4.3%, Pizza 73 down 0.7%.

• Royalty Pool sales declined 2.1% in Q4 and 1.2% for the year, with Pizza Pizza brand sales down and Pizza 73 brand sales slightly up for the year.

• Focused on value-driven promotions, digital innovation, and customer experience to drive recovery.

Financial highlights

• Q4 Royalty Pool System Sales: CAD 160.5 million, down 2.1% year-over-year; full year: CAD 620.6 million, down from CAD 628.3 million.

• Pizza Pizza Q4 sales down 2.4% to CAD 137.7 million; Pizza 73 down 0.2% to CAD 22.8 million.

• Q4 adjusted earnings available for shareholder dividends: CAD 5.5 million, down from CAD 5.9 million.

• Q4 dividends declared: CAD 5.7 million (CAD 0.2325/share), payout ratio 104%; full year: CAD 22.9 million (CAD 0.93/share), payout ratio 110%.

• Working capital reserve at year-end: CAD 6.1 million, down from CAD 8.2 million.

Outlook and guidance

• Plans to continue network expansion in 2025 with 2%-4% traditional restaurant growth and ongoing renovations.

• Ongoing focus on value, menu innovation, digital experience, and customer engagement.

• Anticipates continued competition and consumer spending pressure, but expects momentum from recent initiatives.