The restaurant conglomerate behind Thai Express, Manchu Wok and Mr. Sub is seeing expenses rise as tensions flare in the Middle East, but the added costs aren’t holding up a rebound for the business.
MTY Food Group Inc.‘s chief executive said sales were lower in the first few months of 2026, but improved “significantly” in March and now, April.
“I’m not sure … what the impact of the war is, but so far, it’s showing in our data that our consumers are resilient and showing up to our stores,” Eric Lefebvre told analysts on Friday.
His remarks came after the U.S. and Israel brokered a shaky two-week ceasefire with Iran earlier this week, giving some hope that goods and fuel could soon flow again through a key shipping route blocked by the conflict.
The war began in late February, when the globe was entrenched in tariff drama and when consumers are often still cutting back on spending to recover from the holidays.
The strife has made shipping “complicated,” Lefebvre said.
“The cost of shipping, whether it’s ground or air or maritime, is also becoming more expensive as fuel prices increase and obviously, we don’t know how long that’s going to last,” he said.
“We hope that their solution will come and fuel prices will go down, but for now, we’re starting to see more and more fuel surcharges on our network and obviously, that funnels through the chain.”
MTY has 7,034 quick-service, fast casual and casual dining restaurants under 80 banners like Papa Murphy’s, Wetzel’s Pretzels and Country Style. The vast majority are owed by franchisees.
The company has been around for about 47 years, but its board is in the middle of a strategic review that it has warned could result in a sale.
Lefebvre said Friday he would not comment on the review but committed in the meantime to running the business with “the same discipline and long-term focus that’s defined the company since our founding.”
The Montreal-based company reported a first-quarter profit attributable to owners of $36.9 million, boosted by a foreign exchange gain related to the revaluation of U.S.-dollar denominated intercompany debt.
The profit amounted to $1.62 per diluted share for the quarter ended March 1 and compared with a profit of $1.7 million or seven cents per diluted share a year earlier.
On an adjusted basis, MTY earned 98 cents per diluted share in its latest quarter, up from an adjusted profit of 87 cents per diluted share in the same quarter last year.
Revenue for the quarter totalled $267.8 million, down from $284.8 million a year earlier, while system sales totalled $1.29 billion, down from $1.36 billion.
Overall same-store sales fell 2.5 per cent year-over-year in the quarter as they fell 0.8 per cent in Canada. U.S. same-store sales dropped 3.6 per cent, while international same-store sales declined 1.3 per cent.
Lefebvre said he was “disappointed” by the numbers.
“It was that type of quarter, where we had a little bit more closures than anticipated (and) a little bit fewer openings than anticipated, but again, the pipeline is really strong,” he said.
While MTY had about 200 locations across its various banners under construction during the quarter, it also ended a master franchise licensing agreement with frozen yogurt chain TCBY, cutting eight locations from MTY’s overall footprint.
The company also reduced the number of brands it sells gift cards for at Costco, resulting in a lower number of visits to some of its chains at the start of the year.
While gift cards for banners like Cold Stone Creamery will remain at the retailer, others have disappeared and may only make seasonal appearances to break some consumers of a habit they were forming, Lefebvre said.
“We don’t want it to become almost a cheat code, where people go to Costco before they go to our restaurants, buy $100 of Costco gift cards for $75 and then go to our restaurants that they would have gone to anyways,” he said.
“We’re trying to avoid that discount that’s given to consumers for the wrong reasons.”
This report by The Canadian Press was first published April 10, 2026.
Companies in this story: (TSX:MTY)
