Fast food giant's profits plummet despite bumper sales as inflation, minimum wage increases bite

Record-high sales weren't enough to keep one of New Zealand's most popular fast-food brand's profits from slumping. 

Restaurant Brands, which operates KFC, Pizza Hutt, Carl's Junior and Taco Bell stores in several countries, posted bumper sales of $1.3 billion last year.

But inflation pressure and increases in the minimum wage saw the year profits drop by $15.8 million or 49.3 percent.  

In a release to the New Zealand Stock Exchange, Restaurant Brands said despite bumper sales, cost pressures are taking a toll. 

The company said it was a year of two halves with profit margins recovering in the second half as inflation eased.

It also raised prices and cut costs to increase margins in the second half of 2023.

Restaurant Brands also said underperformance in its stores in California had impacted profits.

The company has 75 KFC stores in Southern California and another 75 in Australia.  It also operates Taco Bell and Pizza Hut in Hawaii.

Company directors have decided not to pay investors a dividend.