Q2/26 First Look: Macro Headwinds Continued; Announced 68 Corp Store Closures

Research evidence excerpt

Q2/26 First Look: Macro Headwinds Continued; Announced 68 Corp Store Closures

Consumer Discretionary

MTY Food Group Inc.

TD SECURITIES INC. - CANADA QUICK TAKE: EARNINGS UPDATE

July 10, 2026

Price: C$37.74 (07/9/2026) Q2/26 First Look: Macro Headwinds

Price Target: C$42.00 Continued; Announced 68 Corp Store

Closures

HOLD (2)

Derek J. Lessard^ THE TD COWEN INSIGHT

514 289 0384

Q2 results were soft as expected, given weak consumer sentiment, intense competition, and

derek.lessard@tdsecurities.com

recent rise in fuel costs adding to consumer and cost pressures. In light of this backdrop, we

Cheryl Zhang, CFA^ are not too surprised by the closure of 68 underperforming corporate stores. While somewhat

416 983 2755 supported by the ongoing strategic review, we still expect shares to weaken today given the

cheryl.zhang@tdsecurities.com

EBITDA miss and store closures.

Andy Zhang^

416 983 4767 Impact: NEGATIVE

andy.zhang@tdsecurities.com

MTY reported Q2/F26 normalized EBITDA of $60.2mm, 5% below TD Cowen's street-low

Key Data estimate of $63.2mm.

Symbol TSX: MTY-T

Market Cap C$862.0MM As expected, same-store sales remain challenged in both Canada and the U.S., given

General: Figures are in Canadian dollars except otherwise ongoing consumer spending weakness and competitive pressures. Canadian SSSG dipped

noted. to -1.8% (vs. -0.8% in Q1), with persisting weakness in QSR (-2.5%) and sequential deterioration

in Fast Casual and Casual (-1.4% and -1.2%), in our view reflecting broad-based consumer

pullback in out-of-home dining. U.S. SSSG improved modestly to -2.2% (vs. -3.6% in Q1), but

still underperformed the industry (Figure 3) which we believe reflects market share loss under a

challenging competitive environment highlighted by aggressive promotions (i.e., MCD offering