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Investing.com -- Shares of Americana Restaurants climbed 2% as the company reported a 14% increase in fourth-quarter sales year-over-year (YoY), marking a turnaround from the 15% decline in the previous quarter.
This positive shift represents the first quarterly growth for the company this year, as it begins to move past the initial impact of boycotts that began in the fourth quarter of 2023.
The Q4 sales results exceeded consensus estimates by 4%. The sales improvement mirrors trends seen in Yum! Brands (NYSE:YUM)’ sales report last week, where KFC’s MENA region sales jumped from a 10% decline in the third quarter to a 21% rise in the fourth quarter, with transactions reportedly returning to pre-conflict levels.
Further down the profit and loss statement, Americana Restaurants experienced an expansion in margins, leading to an adjusted EBITDA that was 3% higher than Street expectations.
However, the company also recognized significant non-financial impairments, and it is expected that the upcoming earnings call will address questions regarding Americana’s long-term brand equity momentum, especially after the easy comparisons that benefited like-for-like sales in the fourth quarter.
Looking ahead to 2025, the company anticipates continued recovery, propelled by the positive momentum seen in the last quarter of 2024. Americana Restaurants intends to focus on regaining customer transactions and increasing the average check size.
The company’s strategy includes expanding strategically, deepening market penetration, and driving product innovation to enhance core offerings and target new day parts. The emphasis will also be on maintaining digital leadership.
However, Americana Restaurants has cautioned that its net profit may face headwinds due to the introduction of corporate tax rates in key regions. The evolving tax landscape is expected to have an impact on profitability, despite the company’s recovery efforts and strategic initiatives.
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