MTY Food Group closed its strategic review without a sale and lifted its quarterly payout to 50 cents a share, a 35 percent increase, while third-quarter franchising earnings showed modest growth against a backdrop of declining same-store sales and a shrinking corporate footprint.

Franchising steadies the ship

Segment profits reached $59.9 million for the 13 weeks ended August 30. Normalized adjusted EBITDA came in at $60.8 million. The franchising and processing segments kept margins in line with the prior year, and franchising EBITDA edged up 1 percent with margins holding at 54 percent. System sales were unchanged at $1.5 billion. Adjusted earnings per share rose to $1.26 from $1.19 a year earlier, and free cash flow net of lease payments climbed to $28.5 million, or $1.25 a share, from $25.8 million and $1.13.

Corporate retreat accelerates

The company shut 74 net locations in the quarter, 50 of them tied to the corporate closure plan unveiled three months ago. Corporate stores now account for 2.6 percent of the network, down from 3.6 percent a year ago. The remaining planned closures are expected in the fourth quarter. Management said the move targets underperforming assets and should reduce losses over time, though it weighs on near-term store counts.

Same-store pressure persists

Same-store sales fell 1.9 percent overall. Canada was roughly flat, the United States declined 2.7 percent, and the international segment dropped 9.1 percent. Net income attributable to owners slipped to $24.8 million, or $1.08 a diluted share, from $27.9 million and $1.22 in the year-ago quarter. Operating cash flow dipped 4 percent to $37.6 million.

Debt paydown continues

Long-term debt repayments totaled $14 million in the quarter, bringing net repayments since the third quarter of 2025 to $61.2 million. The board declared the higher dividend payable November 13 to shareholders of record November 3. The strategic review, launched November 17, 2025, evaluated alternatives including a full or partial sale before the directors opted to continue the current plan.