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Published in Food/Agribusiness

Meritage reports Q3, year-to-date sales growth

BY Thursday, October 08, 2020 04:31pm

GRAND RAPIDS — Despite the uncertainty that has accompanied 2020, Grand Rapids-based franchise operator Meritage Hospitality Group Inc. reported an increase in sales for both the third quarter and the nine months that ended Sept. 27.

Meritage has a portfolio of 335 restaurants in 16 states, which includes 337 Wendy’s restaurants. The company reported $136.6 million in sales for the third quarter, which was a 15.9 percent increase from the third quarter of last year when Meritage recorded $117.9 million in sales. Earnings from operations also took a 40 percent jump to $8.2 million in the quarter compared to $5.8 million this time last year.

Meritage CEO Robert E. Schermer, Jr. COURTESY PHOTO

Also, net earnings increased 74.0 percent to $4.6 million for the quarter.

“Our continued strong sales and earnings performance in the third quarter reflect the underlying strength of our Wendy’s franchise and restaurant operating teams,” Meritage CEO Robert E. Schermer, Jr. said in a statement to investors. “We continue to stay focused on our strategic operating priorities, including employee and customer safety while delivering speed, convenience and affordability.”

The first nine months of 2020 saw similar success with $376.1 million in sales, signifying a 8.6 percent jump from the same time last year, while earnings from operations went up 5.1 percent to $18.6 million.

Meritage also forecasts strong growth ahead, citing the fact that it agreed to build 40 additional Wendy’s restaurants by the end of 2024. The company stated that its focus for the coming year would be new restaurant development, reimagined locations and restaurant acquisitions.

The company appears to have found its footing as a new normal emerges for the restaurant industry — one where fast casual establishments are weathering the storm more effectively. In late March, Meritage suspended financial guidance and postponed its annual meeting that was scheduled for May 19 because of pandemic-related uncertainties.

On the heels of a successful 2019 fiscal year, which saw $467.5 million in sales, the company originally considered 2020 to potentially be a “transformative year,” highlighted by the rollout of the Wendy’s breakfast menu.

Also during the pandemic, Meritage declined $29.1 million in PPP loans because of what it considered to be unclear guidances paired with the fact that restaurant sales had started to level out by late spring.

Read 1550 times Last modified on Thursday, 08 October 2020 22:29
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