The CEO of B.C.-based A&W Canada is vowing to push on with fast-paced growth at the national quick-service food chain amid mixed results in its third-quarter financials.
A&W Food Services of Canada and A&W Revenue Royalties Income Fund (TSX: AW.UN) reported October 14 net income before non-cash items was up $1.4 million — or $11.6% — in the third quarter. Overall profit, however, was down from a year ago.
Net income in 2014’s Q3 was at $4.5 million, down 29.7% from the same period last year when the fast-food chain reported $6.4 million in profit.
Total sales in the royalty pool reached $234 million in the third quarter of 2014. That’s an 11% jump from the same period in 2013 when sales were at $211 million.
A&W CEO and president Paul Hollands told Business in Vancouver the company has opened more than 20 new restaurants since the beginning of the year, which has helped with the increase in sales.
He said A&W aims to open a total of 37 new restaurants by the end of the year to keep pace with the number of restaurants opened last year. At least two-thirds of the new outlets are concentrated in Ontario and Quebec, which Hollands said the company identified about seven years ago as markets where there has been less penetration nationally.
A far larger proportion of the chain’s 800 restaurants are located in Western Canada.
“We still have great opportunities to grow, particularly in Vancouver,” Hollands said, adding the city’s population growth lends itself to further expansion consideration.
He said A&W would continue opening about 37 outlets throughout Canada over the next few years.
Last year, the company — known for its root beer, Chubby Chicken menu items and hamburger family — began serving beef raised without hormones or steroids. This year, it began serving eggs from hens fed on a vegetarian diet.
“Clearly, a lot of the work we’ve done around ingredients — first beef and now eggs — has really resonated with guests,” Hollands said.
A&W said in a statement it would unveil another new major ingredient change on October 20.
