A & W Food Services of Canada (AW) Q2 2026 earnings summary

Executive summary

• Q2 2026 achieved same-store sales growth of 2.1%, the strongest in over two years, driven by successful value-based promotions and the launch of a smash-style burger, increasing guest counts and average cheque.

• System sales grew 3.9% to $469.7 million, with total revenue rising 3% year-over-year to $70.8 million, supported by new restaurant openings and promotional campaigns.

• Opened eight new restaurants in Q2, bringing year-to-date openings to 12, with a focus on Ontario, Quebec, and Pret A Manger expansion; first franchised Pret shop opened at Vancouver International Airport, with more locations planned.

• Operates 1,105 franchised and 10 corporate restaurants, serving over 130 million guests annually, with expansion into the Pret A Manger brand in Canada.

• Recognized as a top Canadian brand with a strong franchisee network and strategic partnership with Petro-Canada supporting new restaurant pipeline.

Financial highlights

• Q2 2026 revenue was $70.8 million, up 3% year-over-year; system sales reached $469.7 million (+3.9% YoY); adjusted EBITDA was $24.4 million, down 4% year-over-year, with margin at 34.5%.

• Net income was $11.7 million, down from $12.5 million in Q2 2025; net income per share was $0.46 (diluted), compared to $0.50 last year.

• Operating costs rose 3% to $37.2 million; general and administrative expenses increased 18% to $13.1 million, mainly due to the biannual national convention and Pret expansion.

• Free cash flow in Q2 2026 was $10.9 million, up from $4.2 million YoY.

• Cash dividend of $0.48 per share declared and paid in June 2026.

Outlook and guidance

• Fiscal 2026 guidance unchanged: Adjusted EBITDA expected between $103–$105 million, up from $100 million in 2025.

• System sales growth expected between 2.5%–5%; same-store sales growth guidance is 0.5%–3%.

• Targeting 1,112–1,120 restaurants by year-end, up from 1,094 in 2025.

• Plans to open three to four franchised Pret A Manger locations by year-end 2026.