Montreal-based MTY Food Group is closing 68 underperforming restaurants over the next six to nine months to stem losses exceeding $10 million. According to chief executive Eric Lefebvre, the majority of these closures will occur in the United States, specifically impacting 45 to 50 Papa Murphy’s locations, while no stores in Quebec will be affected.
MTY Food Group Shifts Strategy After Profit Drop
The decision to shutter nearly 70 locations follows a sharp decline in quarterly financial performance. For the period ending May 31, MTY reported net income of $15.4 million, a significant drop from the $57.3 million recorded during the same quarter the previous year. Revenue also slipped to $279.9 million from $304.9 million, according to company financial results.
Same-store sales fell by 2.1 per cent. Eric Lefebvre attributed these weaker results to a “difficult business environment” and ongoing pressure on consumer spending. The company expects the cost of ending these leases and closing the sites to range between $10 million and $12 million.
Impact on Papa Murphy’s and U.S. Operations
The bulk of the closures target the U.S. market. Lefebvre confirmed during a Friday conference call that 45 to 50 of the affected restaurants are Papa Murphy’s, a take-and-bake pizza chain. Some of these locations may close as early as next week.
While a small number of Canadian restaurants will close, Lefebvre told The Gazette that the move is a “long-term action for the business” designed to remove stores that lost more than $10 million over the last year. He declined to provide specific details on which exact locations would close or the total number of jobs at risk.
Financial Performance Comparison
| Metric | Current Quarter (May 31) | Previous Year Period |
|---|---|---|
| Net Income | $15.4 Million | $57.3 Million |
| Revenue | $279.9 Million | $304.9 Million |
Consumer Spending Trends in Quick Service Restaurants
Frequently Asked Questions
Which MTY brands are affected by the closures?
The majority of the 68 closures are Papa Murphy’s locations. MTY also owns Thai Express, Mr. Sub, and Manchu Wok, though specific closures for these brands weren’t detailed individually.
Will any restaurants in Quebec close?
No. chief executive Eric Lefebvre explicitly stated that the planned closures will not affect any locations in Quebec.
Why is MTY closing these restaurants?
The company is shutting down locations that lost more than $10 million over the past year due to lower sales and a difficult business environment.
How many stores does MTY Food Group own in total?
MTY operates over 7,000 locations globally across more than 80 banners.
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