GRAND RAPIDS, Mich., April 18, 2025 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX: MHGU), recognized as one of the leading franchise operators across the United States, has released its financial outcomes for the first quarter ending March 30, 2025, revealing a challenging period impacted by adverse weather conditions.

First Quarter Highlights:

  • Sales for this quarter totaled $154.5 million, a decrease compared to $162.8 million during the same timeframe last year.
  • The Company reported a loss from operations amounting to $(3.7) million, contrasting sharply with earnings of $3.9 million during the same quarter in the previous year. This downturn was largely attributed to multiple closures resulting from severe weather events.
  • Net earnings also reflected a significant loss of $(4.3) million, a stark contrast to the net earnings of $1.6 million reported a year earlier.
  • Consolidated EBITDA, a non-GAAP measure, fell to $2.2 million from $9.9 million for the same period in the prior year.

The CEO of Meritage, Robert E. Schermer, Jr., commented on the impact of the unusual weather patterns, stating, As previously reported, Company sales and earnings were significantly impacted by atypical weather that affected all of our markets during the first quarter. Severe weather events in our southern U.S. markets resulted in decreased consumer traffic and numerous temporary restaurant closures due to record levels of snow, ice, and flooding. Schermer remained optimistic about the future, reaffirming the Company's forecast for a 30% to 40% increase in diluted earnings per share (EPS) for the entire year of 2025. This growth is expected to be driven by new product launches at Wendys in the latter half of the year, emphasizing protein-led innovations and collaborative marketing efforts.

Looking ahead, Meritage plans to implement exciting technological advancements, notably launching its first restaurant utilizing Wendys Fresh AI. This generative AI bot technology will provide a streamlined and automated ordering experience for customers at the drive-thru. The company is dedicated to enhancing both customer satisfaction and employee efficiency by leveraging technological solutions and expanding delivery options.

During the first quarter, Meritage successfully opened three new Wendys locations and intends to unveil an additional 7 to 10 Wendys outlets throughout the remainder of 2025. These new openings are part of the companys strategy to capitalize on favorable unit-level economics and to enhance guest frequency through modern restaurant designs and digital upgrades.

In addition to its Wendys operations, the companys proprietary breakfast and brunch concept, Morning Belle, reported noteworthy success with a remarkable same-store sales increase of 21.9% compared to the previous year, surpassing trends within the broader industry segment. With plans to open 3 to 5 new Morning Belle locations this year, the company is confident in the concepts continued viability and profitability.

2025 Outlook: Promising Earnings Forecast Ahead:

  • Projected sales growth of up to 3%.
  • Expected earnings from operations growth of 40% to 50%.
  • Projected net earnings growth of up to 50%.
  • Anticipated EBITDA growth of up to 15%.
  • Expected growth in diluted EPS ranging from 20% to 30%.

The strategic focus of Meritage is on maximizing its robust operating platform and unique in-house restaurant development expertise to offer consumers the highest levels of quality, convenience, and affordability. The Company recognizes the importance of acquisitions, renovations, and new restaurant development as vital components of its business model.

Over the next five years, Meritage aims to expand through strategic acquisitions and development of new Wendys and Morning Belle restaurants. As they plan for this next generation of growth, including the involvement of new capital partners, the company remains active in strategizing for future events that will enhance shareholder value and liquidity.

About the Company:

Meritage Hospitality Group stands out as one of the premier restaurant operators in the nation, currently managing approximately 381 restaurants across several states including Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. Headquartered in Grand Rapids, Michigan, the company boasts a workforce of around 12,000 employees spread across 15 states. As of December 29, 2024, Meritage had 8,520,000 diluted weighted average shares outstanding.

For additional information about the company and its operations, including financial disclosures in accordance with amended SEC Rule 15c2-11 and FINRA Rule 6432, visit its website at Contact: Robert E. Schermer, Jr.
Meritage Hospitality Group Inc.
(616) 776-2600 ext. 1012