Retail Food Group Limited (ASX:RFG) Reports Strong Q1 FY25 Performance
Q1 FY25 Performance Metrics
Retail Food Group Limited (ASX:RFG) reported domestic network sales of $128.2 million for the first quarter of FY25, reflecting a 1.8% increase compared to the previous period. During this time, the company opened 13 new outlets, while the average transaction value rose by 3.6% to $12.69. Although customer counts showed a slight decline of 1.7%, the average weekly sales increased by 3.8%, demonstrating resilience amid a challenging retail landscape.
Strategy Execution and Acquisitions
The company is executing its strategy to enhance customer experience and drive growth. CEO Matt Marshall noted, “We have a clear action plan and are committed to executing our strategy.” Recent activities include the acquisition of CIBO Espresso, set to close in December 2024, adding 22 outlets in South Australia. Additionally, Beefy’s brand has expanded from nine to twelve outlets since the acquisition, now available across all third-party channels.
Café, Coffee, Bakery Segment Growth
The Café, Coffee, Bakery (CCB) segment saw impressive growth, achieving $93.5 million in domestic network sales, up 5.2% from the prior year. Average transaction value in this segment rose by 6.5%, supported by same-store sales growth. Strategic brand management and outlet quality improvements have contributed positively to these results.
Challenges in Quick Service Restaurants
In contrast, the Quick Service Restaurants (QSR) division faced challenges, with network sales down by 6.3%. This segment accounted for 27% of group network sales but reported a decline in customer counts. However, the launch of new products like Piadinas is expected to bolster sales as the company aims to create additional opportunities within this segment.
Outlook and Future Opportunities
Looking ahead, Retail Food Group is optimistic about its growth initiatives. The company is positioned to expand both domestically and internationally, leveraging its core brands. Matt Marshall emphasized the importance of understanding customer insights and capitalising on growth drivers within the physical and digital landscapes to maximise shareholder value.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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