MTY Food Group's Q2 Earnings Drop Amid Franchise Growth

MTY Food Group's Q2 2025 report shows a 12% drop in shares, but the company's franchise engine continues to deliver. The stock decline is seen as "noise" by experts, who emphasize the company's strong performance. MTY Food Group has a history of similar declines in the past, and its long-term success is expected to prevail.

Montreal, July 2, 2025 - MTY Food Group Inc. (MTY) reported its second-quarter (Q2) 2025 financial results, revealing a 12% drop in shares, but investors remain optimistic about the company's long-term prospects. Despite the stock decline, analysts view it as "noise" and emphasize MTY's strong performance, particularly within its franchise segment.

Key highlights from the Q2 2025 report include:

- Net Income: Net income attributable to owners increased to $57.3 million, or $2.49 per diluted share, compared to $27.3 million, or $1.13 per diluted share, in Q2 2024 [1].
- Cash Flows: Cash flows provided by operating activities were $40.2 million, down from $40.6 million in Q2 2024 [1].
- Franchise Segment: Franchise segment normalized adjusted EBITDA increased by 3% to $54.0 million, compared to $52.6 million in Q2 2024 [1].
- System Sales: System sales for the quarter increased slightly to $1.5 billion compared to Q2 2024 [1].
- Location Count: The company ended the quarter with 7,046 locations, a net decrease of one location compared to the end of the last fiscal year [1].
- Dividend: MTY declared a quarterly dividend of 33.0¢ per share, payable on August 15, 2025 [1].

The stock decline is seen as temporary, with experts attributing it to broader market conditions rather than MTY's performance. MTY's franchise engine continues to deliver strong results, with the franchise segment showing a 3% increase in normalized adjusted EBITDA and modest growth in system sales.

Outlook

MTY continues to navigate a dynamic operating environment. The company is actively implementing strategic initiatives to position the business for growth once the macroeconomic environment improves. Management expects stability in normalized adjusted EBITDA margins across all three segments, though fluctuations in corporate store margins may occur. Overall, management remains confident about its ability to drive margin improvement through positive unit growth, enhanced efficiencies, and a reduction in less profitable corporate stores.

References

[1] https://finance.yahoo.com/news/mty-reports-second-quarter-results-100000788.html