The following is a summary of the Pizza Pizza Royalty Corp. (PZRIF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Pizza Pizza Royalty Corp reported a 5.3% decrease in same-store sales across both Pizza Pizza and Pizza 73 brands.

• Royalty Pool system sales decreased by 4.6% totaling $155.8 million.

• The partnership's royalty income earned as a percentage of the Royalty Pool sales decreased by 4.4% to $10 million.

• Shareholder dividends declared were $5.7 million for the quarter, resulting in a payout ratio of 109%.

• Working capital decreased by $500,000, ending the quarter at $6.3 million.

Business Progress:

• Opened 8 new restaurant locations in Q3 with ongoing expansion in Canada and Mexico.

• Significant focus on value offerings and promotional strategies to enhance sales.

• Leveraged technology and digital platforms to boost customer access and convenience.

• Introduced several new menu items, including a collaborative effort with Tabasco.

Opportunities:

• Capitalized on savings due to more consumers choosing pickup over delivery, aligning with ongoing omnichannel strategy enhancements.

• The new XXL pizza at Pizza 73, priced at $19.99, became a popular value offering, boosting sales.

• Collaborations and event partnerships like the Calgary Stampede and Montreal's Pride events provided opportunities to enhance brand visibility.

Risks:

• Heightened competition and aggressive promotional tactics by competitors challenged sales volumes and growth.

• Economic pressures led to a decline in consumer spending affecting traffic and flat average ticket values in both restaurant brands.

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