MTY Food Group Inc Q4 2018 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : I'd like to focus a little bit on the weakness in the U.S. I think, last quarter, we had some trouble pinpointing some of the factors behind that. I guess other than Mother Nature's forces, can you maybe call out anything you're seeing on our key markets of California, Maryland, Arizona?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And shifting over to Canada. Some acceleration, I guess, in the comps compared to last quarter. I think you did call out QuTbec as being the first weak comp in a while. Can you maybe talk a little bit about what happened there?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay, that's helpful. And just one last one, if I may. On IRG, there's an improvement -- pretty good improvement from last quarter, and your MD&A calls out like a pickup in ribs and steaks at BGton Rouge; some, I guess, normalized weather compared to last quarter. But is there anything else that you'd like to call out in some of those banners that are just performing better than expected? Or is this just the pickup in those sales?

Question: Daniela Campo - Macquarie Research - Analyst : So my first question is regarding same-store sales growth, so can you break down what drove the flat same-store sales growth in Canada. It seems like Ontario, Alberta and British Columbia were all positive while Saskatchewan was weak. However, Saskatchewan is quite small. So what else is offsetting the positive growth in those 3 big provinces?

Question: Daniela Campo - Macquarie Research - Analyst : Got it. That makes sense. Then, my second question. In regards to IFRS 16, can you talk about how it will impact your financial statements? And how should we think about our forecasting going forward?

Question: Daniela Campo - Macquarie Research - Analyst : Okay, perfect. And then my third question is regarding delivery. We read a lot about growth in delivery among various brands, and we know that Scores, for example, is a brand where delivery is very important. Can you discuss some of the other brands in the portfolio where you're seeing the most significant impact from deliveries?

Question: Daniela Campo - Macquarie Research - Analyst : Perfect. And I guess I'll sneak one last one since you did mention SkipTheDishes. Are you seeing an uptick in third-party delivery services? And how are you managing profitability with these services?

Question: Elizabeth Johnston - Laurentian Bank Securities, Inc., Research Division - Analyst : Just in terms of M&A, do you think there's an opportunity when it comes to, I guess, in the U.S. specifically, to try to add acquisitions that are not in the frozen treats category? Is that something that you thought about doing? Or do you really prefer to be more opportunistic? Any thoughts around that strategy?

Question: Elizabeth Johnston - Laurentian Bank Securities, Inc., Research Division - Analyst : And when it comes to geographic representation, again, in the U.S., specifically, is it possible that you could look to -- even within frozen treats, if you were to add locations or additional banners more in the Central U.S., would that help with some of the diversification? Or do you feel that the best diversification still would be to go outside of the frozen treats category?

Question: Elizabeth Johnston - Laurentian Bank Securities, Inc., Research Division - Analyst : Okay, great. And just in terms of the impairment taken in this quarter specifically, any additional color you could provide with respect to what exactly that was in Canada and in the U.S.?

Question: Elizabeth Johnston - Laurentian Bank Securities, Inc., Research Division - Analyst : And some of those smaller brands that aren't performing as well, do you see an opportunity to potentially divest those brands? Not to say they'd be any better in someone else's hands, but then at least you wouldn't have those impairments on your books. Is that something you consider as a divestiture?