Q: Hi, Could you please comment on MTY earnings. Thank you
5i Research Answer:
EPS of 71c missed estimates of 84c; Revenue of $278M matched estimates. EBITDA of $59.5M missed estimates of $62.5M. Like some other consumer-facing names, MTY had a rough quarter with reduced consumer spending. Cold weather did not help either. Revenue fell 2.6%. EBITDA fell nearly 6% year over year. Cash flow however did set a record, with good free cash flow conversion. EPS is expected to show an overall decline this year, with a 10% or so recovery expected in 2025. The company is cheap at 10X earnings, but is fairly small and quite leveraged. It has missed half of its last eight quarters. We would not give it a strong endorsement right now.