(file image) Photo: RNZ / Cole Eastham-Farrelly
Restaurant Brands says its full-year profit could be half of its 2022 results as global inflationary pressures and rising ingredient and wage costs eat into profit margins.
The group, which operates in four regions, with KFC, Taco Bell, Carl's Jr and Pizza Hut brands, said it expected profits to be between $12 million and $16m for the 2023 financial year.
Earlier this year, the company said it would be in line with its full-year 2022 earnings, of $32.1m.
The company said high input costs and lower than expected sales growth in California and Hawaii were significantly impacting performance.
"Given these factors will continue for some time, at a level far greater than anticipated, it has become apparent that recovery in the second half is also going to be weaker than expected," the company said in an update to the NZX.
"While the business has implemented a strategic programme of price increases and cost control measures to relieve margin pressures, we have not yet been able to raise prices to fully offset the input cost increases."
Chairman José Parés acknowledged the adjustment would be disappointing for shareholders but said he had confidence in the company's approach to managing the challenges.
The company said sales for the second quarter ended 30 June were up 7 percent to $331.6m, reflecting the company's recovery from the effects of Covid-19 and the price increases that were implemented.
Sales at all of the company's New Zealand stores grew across all brands, largely driven by price increases and the easing of pandemic-related trading constraints.
Restaurant Brands will release its half-year results later this month.
