Canada's A&W Food Services Q3 revenue rises on burger promotion

Overview

• Canada quick-service burger chain's fiscal Q3 revenue grew 11% yr/yr

• Net income for fiscal Q3 rose yr/yr, driven by higher revenue and lower finance expense

• Company opened 9 new A&W restaurants and 1 new Pret shop in Q3

Outlook

• Company maintains 2026 Adjusted EBITDA outlook at C$103 mln to C$105 mln

• A&W expects 2026 System Sales Growth of 2.5%-5.0% and Same Store Sales Growth of 0.5%-3.0%

• Company plans to end 2026 with 1,112 to 1,120 A&W restaurants in Canada

Result Drivers

• BURGER PROMOTION - Co said smash-style burger promotion drove 1.8% same store sales growth in Q3

• NEW RESTAURANTS - Higher equipment and turnkey revenue reflected opening of six additional A&W restaurants and one Pret shop in Q3

• SERVICE FEE MIGRATION - Co said increase in service fee revenue was due to migration of A&W restaurants to higher service fee rate

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the restaurants & bars peer group is "buy."

• Wall Street's median 12-month price target for A&W Food Services of Canada Inc is C$40.00, about 10.6% above its October 15 closing price of C$36.18

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 15 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)