Quidditch Acquisition Inc.

Quidditch's systemwide same-store sales were down 8.9% in the first quarter ended Jan. 17, 2021, which represents an improvement from the approximately 50% drop at the height of the pandemic. However, this occurred while other Mexican fast-casual players reported large sales gains, which--in our view--indicates that the company is likely losing market share to its competitors. We believe Quidditch's sales will remain challenged over the next 12 months as the volume of travel remains subdued and remote working trends reduce the level of economic activity in urban centers. Still, the company's franchise business provides it with a steady, albeit small, revenue stream with good margin throughput that has buoyed its EBITDA generation. Quidditch has also experienced few franchise closures over

...In our view, the company's capital structure is unsustainable over the coming year due to its thin cash generation and relatively high debt burden. Despite signs of an economic recovery, we believe the current environment remains uncertain for Quidditch (Qdoba). This is due to its impaired catering business and restaurants that are located in dense urban areas, malls, and airports, which have been slower to reopen and recover amid the coronavirus pandemic. Nevertheless, the company's operating trends have improved relative to a year ago when the government's pandemic restrictions were first introduced. Quidditch's systemwide same-store sales were down 8.9% in the first quarter ended Jan. 17, 2021, which represents an improvement from the approximately 50% drop at the height of the pandemic. However, this occurred while other Mexican fast-casual players reported large sales gains, which--in our view--indicates that the company is likely losing market share to its competitors. We believe...

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