Montreal-based MTY Food Group is closing 68 corporate-owned restaurants as it works to improve profitability following weaker sales and earnings. The company said the closures will take place over the next several months and are aimed at removing locations that have consistently lost money. Management believes the decision will strengthen its overall business despite the short-term impact.
The move comes as consumers continue to spend more cautiously amid higher living costs, putting pressure on restaurants across Canada and the United States.
Sales and Profit Decline Weigh on Business
MTY reported a significant drop in its latest quarterly earnings, with both revenue and net profit falling compared with the same period last year. The company said lower customer traffic, inflation, and higher operating expenses contributed to the weaker financial performance.
Same-store sales also declined, reflecting softer demand across several of the company’s restaurant brands. Executives noted that rising food prices and labor costs have made it increasingly difficult for some locations to remain profitable.
Papa Murphy’s Locations Make Up Most Closures
A large portion of the planned closures will involve Papa Murphy’s, the U.S.-based take-and-bake pizza chain owned by MTY. Company leaders said many of these restaurants have struggled for years despite efforts to improve performance.
By closing its weakest-performing outlets, MTY expects to reduce ongoing losses and focus resources on brands and locations with stronger growth potential.
Company Focuses on Long-Term Growth
Despite the closures, MTY emphasized that it remains committed to expanding its successful brands. The company operates thousands of restaurants across Canada, the United States, and several international markets through a portfolio of more than 80 restaurant concepts.
Executives said streamlining operations is part of a broader strategy to improve efficiency and position the company for sustainable long-term growth as economic conditions gradually improve.
Outlook Remains Cautiously Optimistic
While the restaurant industry continues to face challenges from inflation and cautious consumer spending, MTY believes the restructuring will create a healthier business over time. Investors will closely monitor upcoming quarters to see whether the cost-cutting measures help restore earnings and support future expansion.
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