New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Restaurant Brands 1Q22 sales — Initial impressions</h2>
Restaurant Brands (RBD) reported 1Q22 sales of NZ$275m, up +6% on 1Q21. Our expectation for FY22 sales growth is +8%. Cost pressures remain a key question, with no clear read through in the announcement. Six new stores were added across geographies in the quarter with the closure of one Carl’s Jr. store in NZ. At the FY21 results management guided to 20 new stores throughout the year.
We view RBD as offering a more defensive exposure to consumer spend, with a track record of execution. Peers and RBD have de-rated during recent months, however RBD continues to trade near the top end of peers and we continue to view the current risk-reward as balanced, NEUTRAL.
Divisional summary
<ul>
<li>New Zealand — 1Q22 same store sales (SSS) -0.5%: Total sales were up +2.9%. Pizza Hut and Carl’s Jr. showed solid SSS growth. KFC SSS was impacted by reduced trading hours and lack of dine-in traffic due to the Omicron outbreak.</li>
<li>Australia — SSS +1.6%: Total sales were up +8.7%, attributed to new store openings and store acquisition activity. Mall and in-line inner city store sales are still to recovery to pre-COVID levels.</li>
<li>Hawaii — SSS +2.1%: Total sales up +0.4%. The ease of dine-in restrictions saw a shift back to dine-in sales relative to delivery. This resulted in the uplift of Taco Bell sales versus a partial pull back in Pizza Hutt sales.</li>
<li>California — SSS +0.3%: Total sales up +3.4%. SSS growth has been maintained despite cycling two Fiscal stimulus payments in Jan 2021 and March 2021, boosting KFC sales in 1Q21.</li>
</ul>
Quarterly same store sales growth (local currency)
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Source: RBD, Forsyth Barr analysis

Restaurant Brands 1Q22 sales — Initial impressions
Restaurant Brands (RBD) reported 1Q22 sales of NZ$275m, up +6% on 1Q21. Our expectation for FY22 sales growth is +8%. Cost pressures remain a key question, with no clear read through in the announcement. Six new stores were added across geographies in the quarter with the closure of one Carl’s Jr. store in NZ. At the FY21 results management guided to 20 new stores throughout the year.
We view RBD as offering a more defensive exposure to consumer spend, with a track record of execution. Peers and RBD have de-rated during recent months, however RBD continues to trade near the top end of peers and we continue to view the current risk-reward as balanced, NEUTRAL.
Divisional summary

New Zealand — 1Q22 same store sales (SSS) -0.5%: Total sales were up +2.9%. Pizza Hut and Carl’s Jr. showed solid SSS growth. KFC SSS was impacted by reduced trading hours and lack of dine-in traffic due to the Omicron outbreak.
Australia — SSS +1.6%: Total sales were up +8.7%, attributed to new store openings and store acquisition activity. Mall and in-line inner city store sales are still to recovery to pre-COVID levels.
Hawaii — SSS +2.1%: Total sales up +0.4%. The ease of dine-in restrictions saw a shift back to dine-in sales relative to delivery. This resulted in the uplift of Taco Bell sales versus a partial pull back in Pizza Hutt sales.
California — SSS +0.3%: Total sales up +3.4%. SSS growth has been maintained despite cycling two Fiscal stimulus payments in Jan 2021 and March 2021, boosting KFC sales in 1Q21.

Quarterly same store sales growth (local currency)

Source: RBD, Forsyth Barr analysis

Restaurant Brands: 1Q22 Sales — Initial Impressions

Restaurant Brands NZ

Restaurant Brands: 1Q22 Sales — Initial Impressions