VANCOUVER – A&W Revenue Royalties Income Fund (TSX:AW.UN) says weak economic conditions and a long winter took a bite out of their first-quarter sales this year, however it still managed to post a profit of $3.9 million.
The fast food chain said Tuesday the profit for the quarter ended March 24 was up from $3.2 million a year ago, helped by lower interest costs and lower taxes.
The increase in profits came as royalty income for the fund slipped to $5.09 million for the quarter, down from $5.2 million a year ago, while sales in the royalty pool slipped to $169.9 million, from $173.4 million.
The drop in sales came despite an increase in the number of restaurants included in the pool to 760 from 737 a year ago.
Same-store sales dropped by 3.7 per cent.
“This winter has been one of the longest and coldest Canadian winters in recent memory and this has had a significant impact on our same store sales,” said Paul Hollands, President and CEO of A&W Food Services of Canada Inc. in a statement.
A&W says it was focused on attracting more customers with new menu items, including sweet potato fries, thick cut fries and chicken wraps.
The response to these menu additions has been positive,” said Hollands.
The A&W Revenue Royalties Fund, which owns the A&W trade-marks, earns royalties on the sales of restaurants in the royalty pool.