08:33 AM EDT, 05/02/2025 (MT Newswires) -- A&W Food Services of Canada ( AWFDF ) on Friday provided an updated outlook for 2025 and its dividend, as it reported results for a first quarter impacted by a transaction that saw Food Services indirectly acquire the trademarks used in the A&W business in Canada through the acquisition of all of the units of A&W Revenue Royalties Income Fund which it did not already own.

Due to that transaction, the financial results for Q1 2025 are not directly comparable to the financial results for Q1 2024. In order to improve comparability of net income per share, the number of shares used to calculate the net income per share for Q1 2024, has been adjusted to reflect the equivalent number of common shares of Food Services that were outstanding after the reorganization that was undertaken as part of the transaction.

The company, which opened seven new A&W restaurants during the quarter, reported Q1 net income of near $9.3 million compared with $7.5 million, a year earlier.

Food Services reported net income per share of $0.37 in Q1 compared with $0.50 per share, a year-ago, due to the increase in the weighted average number of shares outstanding from 9.5 million in Q1 2024 to 24 million in Q1 2025, partially offset by the increase in income attributable to its shareholders.

It said an increase in total revenue to $61.1 million compared with $58.8 million a year earlier is attributable to franchising revenue which was higher primarily due to higher equipment sales as a result of an increase in the number of A&W restaurants modernized during the same period.

System Sales of $396.9 million were up 2.0%, despite the impact of severe weather conditions on guest counts in many Canadian communities, particularly acute in period two of the quarter.

"During the quarter, we achieved positive same store sales growth of 0.4% which is positive given that the first quarter was the strongest quarter of 2024 in terms of same store sales growth. This reflects our efforts to provide more value offerings in 2025 given the shift in consumer pressures and slowdown in the economy that started mid-year last year," said A&W Chief Executive Susan Senecal.

The company also declared a cash dividend of $0.480 per share in Q1 and said it is committed to maintaining that level of dividends for the balance of Fiscal 2025.

For Fiscal 2025, the company expects adjusted EBITDA to be between $96 million and $101 million ($93.5 million in Fiscal 2024, Income before income taxes of $50.0 million in Fiscal 2024) and total A&W restaurants to be between 1,085 and 1,100 by end of Fiscal 2025 (1,073 by end of Fiscal 2024).

It also sees Annual System Sales Growth of 1.5% to 4.5% (0.8% in Fiscal 2024), and Annual Same Store Sales Growth of 0.0% to 3.0% (minus 0.6% in Fiscal 2024).

CEO Senecal said: "In Q2, we continue to navigate adverse weather and uncertain economic conditions due to recent tariffs and counter-tariffs but are pleased with the performance of our value offerings and marketing initiatives in this last quarter and in their ability to better appeal to value conscious guests."

"Now, more than ever, with so much macro economic uncertainty we are also pleased with our progress through the end of Q1 2025 on our strategic path to achieving 30% profitability improvement for our franchisees by 2028."

Shares of the company closed up 2.3% to $32.95 Thursday on the Toronto Stock Exchange.