Aegis Brands Reports Third Quarter Results
St. Louis restructures for accelerated growth
TORONTO, Nov. 1, 2024 /CNW/ - Today, Aegis Brands Inc. (TSX:AEG) reported financial results for the third quarter ended September 29th, 2024.
Highlights:
System sales of $34.0 million in the third quarter increased 4.0% over the prior year and increased 11.4% to $103.0 million year to date.
Same store sales rose 1.3% and 8.4% in the quarter and year to date respectively.
A one-time restructuring charge of $0.6 million was recorded in the quarter to reduce overhead and better position St. Louis for future profitability.
The company decided to exit the Wing City brand, resulting in an impairment charge in the quarter of $1.1 million.
EBITDA from continuing operations in the quarter was $1.3 million compared to $1.6 million last year.
Net Loss for the quarter was $1.6m or $0.02 per share. Adjusted for restructuring costs, Net Income from continuing operations for the quarter was $0.3 million or $0.00 per share.
St. Louis Bar & Grill
Same store sales rose by 1.3% and traffic decreased by 0.4% over the same quarter last year. Year to date, same stores sales increased by 8.4% with traffic increases of 5.8%. Adjusted for the restructuring charges, St. Louis contributed $2.3 million and $2.6 million Net income and EBITDA respectively for the quarter and $7.9 million Net Income and $8.8 million EBITDA year to date.
"Year to date St. Louis has achieved 8.4% same store sales growth 5.8% same store traffic growth and grown the system sales by 11.4%. The top line growth at the store level, along with better expense management, has positively impacted the franchisees' earnings." said Steven Pelton, President and CEO of Aegis Brands. "Building on a strong foundation, the team's hard work has continued to improve the store level profitability. The financial gains at the store level allows us to attract new franchisees and grow with existing multi-unit operators. Although we will never stop finding new ways to increase the profitability for our franchisees, we are also focusing on new store growth for the remainder of 2024 and beyond."
In September, St. Louis opened its 79th location. The new Promenade Mall location in Thornhill Ontario is the first location with two "Top Golf Swing Suites" sports simulators. "We have seen the rise and success of many "eatertaiment" concepts," said Pelton. "These golf and sport simulators provide additional reasons for guests to visit our stores, which can improve the return on investment for franchisees, and expand our ability to capitalize on locations with larger footprints."
A growing pipeline of locations and franchisees in the East Coast, Ontario, and Manitoba have been developed and will expand as store level profitability continues to improve. The company is currently focused on filling in the strongest markets.
St. Louis continues to move forward with its retail product plans. The famous St. Louis burgers have been available in grocery for two BBQ seasons. The signature wings and boneless bites will soon become available for consumers outside of our restaurants. "The addition of our wings and boneless bites to the grocery channel will provide our guests with a new occasion to enjoy our signature products - on the nights they are staying in. We believe these products will bring further growth opportunities within this channel for other St. Louis branded products." said Pelton.
To continue to build on the strong performance, St. Louis is in the middle of a three-step program to attract new guests and encourage existing guests to visit more often. The company's vision is "to create a world where everyone is a regular" and the first step was to reinforce the foundation of the business with an expanded focus on hospitality. The second step is an evolved and improved menu offering. Menu launches over the next few quarters will introduce new items with the intent to attract new guests, while staying true to our guests who have been loyal to the brand for years. The final step is a brand refresh. "We are continually improving and becoming more broadly appealing, and the brand refresh will help signal these changes to our guests."
Wing City by St. Louis
The two store Wing City trial did not generate the sales and profitability the company had hoped for. With the opportunity for accelerated new store growth with the St. Louis brand, the company has decided to suspend any further development of the Wing City brand.
Sweet Jesus Ice Cream
In August, Aegis signed a Master Franchise Agreement for the Sweet Jesus ice cream brand within Canada. This agreement allows Aegis to control the development of any new locations and participate in the royalty stream coming from the sales of the Sweet Jesus products within the St. Louis stores. In April, St. Louis replaced its existing dessert offering with the Sweet Jesus products, resulting in 300+% increases in an otherwise small menu category.
Aegis
