(Reuters) -Mexico-based restaurant chain operator Alsea posted on Tuesday a worse-than-expected 98% tumble in its third-quarter net profit, due in part to a weaker Mexican peso against the U.S. dollar that also drove up financing losses.
Alsea, which operates chain restaurants and cafes including Starbucks, Burger King and Domino’s Pizza, also cited “ongoing macroeconomic challenges,” and a 90 million euro ($97.15 million) payment related to the acquisition of a European business earlier in the year.
The slim net profit of about 12 million pesos ($604,000) included the performance of Alsea’s business in Argentina, where inflation is in the triple digits, and stripped out so-called IFRS 16 accounting effects, the company said in a statement.
Controlling for those variables, Alsea’s net profit for the quarter would have totaled 186 million pesos, or down around 66% from the same quarter a year earlier.
Alsea reported that its quarterly revenues rose 6.5% from a year earlier to total 20.74 billion pesos.
The profit was far below the average forecast of analysts polled by LSEG, who predicted a quarterly net profit of just over 600 million pesos from expected revenues of 20.9 billion pesos.
“Although we are facing a difficult base of comparison, same-store sales rose by a high-single-digit (7.7%) from last year,” Chief Executive Armando Torres said in a statement.
Alsea reported that its net sales during the three-month period rose by 11.7% excluding the exchange rate effect, while sales in Mexico, its main market, were up by 7.9%.
The company’s total financing loss during the July-to-September period rose by about 80% to reach 1.48 billion pesos, an increase of 658 million pesos compared to the year-ago period, which it said was mainly due to a weaker Mexican peso.
($1 = 19.6921 Mexican pesos at end-September)
($1 = 0.9264 euros)
(Reporting by Sarah Morland and Kylie Madry; Editing by Leslie Adler and Jamie Freed)
