The chief executive of MTY Food Group Inc. says his company has the appetite for acquisitions but hasn’t seen anything it feels compelled to gobble up lately.
“There’s been a lot of corporate store networks that were not necessarily interesting for us. There’s been a lot of fixer uppers, a lot of chapter 11 situations,” Eric Lefebvre told analysts on a Friday call.
Despite the lack of deals enticing him, he senses the market is improving from where it was a year ago, and when it shifts in his company’s favour, it will be ready.
“It’s just a matter of us to be at the table for those right deals when they come in and to be able to make them cross the finish line,” he said.
MTY, a Montreal-based company, already has an extensive portfolio of fast-food and restaurant brands, including Thai Express, Manchu Wok, Wetzel’s Pretzels, Mr. Sub, Country Style and Papa Murphy’s.
Across all the brands, it has 7,061 locations. Some 6,805 are franchises and the rest are owed by the corporation. More than half are in the U.S. with about 35 per cent in Canada and seven per cent in other markets.
Growth has long been on MTY’s radar but has become even more important as macroeconomic volatility stemming from a global trade war, industry competition and rising prices sweeps the fast-food sector and beyond.
MTY’s latest quarter saw its net income attributable to owners fall to $27.9 million, or $1.22 per diluted share. The results for the third quarter compared with a net income attributable to owners of $34.9 million, or $1.46 per diluted share in the year prior.
The company attributed the year-over-year decrease to impairment losses of $6.2 million related to the franchise rights and trademarks for one of its U.S. brands operating internationally and three banners in its Canadian segment.
Even with the decrease, Lefebvre maintained his company was “well positioned to navigate near-term challenges and capture long-term opportunities.”
Its revenue edged up to roughly $297 million in the quarter ended Aug. 31, compared with $292.8 million a year earlier.
On an adjusted basis, MTY earned $1.19 per diluted share, unchanged from the prior year’s third quarter.
The quarter saw the company open 96 locations but close 81. It’s been working all year with franchisees to exit underperforming restaurants, so it can focus more of its time and resources on markets with the strongest growth and engagement, Lefebvre said.
He noticed it was MTY’s mall locations in Canada that “hurt us a little bit more” in the latest quarter.
“It probably speaks to the incredible weather we’ve had and that people are not necessarily going to malls as much,” he said.
In the U.S., MTY had to take price for several brands. Taking price is when a company accepts prevailing prices in the market because it lacks the footprint or dominant position it would need to dictate what it wants to be the norm in the region.
MTY took price for Village Inn, a chain of family restaurants, and Famous Dave’s, a barbeque banner.
Village Inn and Famous Dave’s saw no impact on traffic, but the latter was more affected because it’s also coping with soaring commodity costs.
“If you just look at the price of beef, for example, the cost of brisket for us is going up rapidly, so we do face some issues. Ribs are getting more expensive as well,” Lefebvre said.
“We can increase prices only by so much and then we need to figure out ways to control our prime costs, and unfortunately, the market is not going in the right direction for our proteins at the moment.”
MTY also saw plenty of action in the pizza segment of the market, where it owns Papa Murphy’s, Tosto and Pizza Delight.
“It’s a very competitive space with the pizza. You look at our competitors and they all admitted to over-investing in marketing in the last few quarters, some of them $30, $40 million,” Lefebvre said.
Because that’s “not something we can afford to do,” he said the company was working on how it can “compete differently” but it isn’t prepared to share those plans just yet.
In the interim, some local franchisees are stepping up and leaning into their own marketing efforts, which he finds are key to delivering sales.
“Pizza is very marketing driven, so as soon as you close the tap, you see the sales going down right away,” he said.
“Unfortunately, some franchisees are just not putting their money into their businesses at the moment, so we’re trying to work with them.”
This report by The Canadian Press was first published Oct. 10, 2025.
Companies in this story: (TSX:MTY)
