American Restaurants International’s profit tumbled in the first quarter of 2024, as MENA-based customers continue to reject Western brands in response to the Gaza conflict.
The quick service restaurant operator reported a 16.3% dip in revenues year-on-year, to $493.5 million.
Net profit dipped more steeply, from $58.1 million in the first quarter of 2023 to $28 million in Q1 this year – a drop of 51.8%.
Americana, which runs 2,456 restaurants across the region, attributed the decline in sales to “ongoing geopolitical tensions in the region, as well as the seasonal effect of Ramadan period”.
The company, which operates brands such as KFC, Pizza Hut, Hardee’s and Krispy Kreme across the MENA region, opened 37 new outlets in the first three months of this year, with a similar count of stores under construction. The operator slashed almost 100 jobs amid internal restructuring and consumer disengagement, following the Gaza crisis.
Americana’s shareholders approved a total dividend of $179.4 million – equivalent to $0.0213 per share - at its annual general meeting held on April 24. The company, which is listed on the Abu Dhabi Securities Exchange and Tadawul, expects to open 200-225 new stores this year.
Several US brands perceived as pro-Israel have been hard-hit in the wake of the Palestinian conflict. Kuwait-based Alshaya Group confirmed in March that it planned to furlough employees across its Starbucks MENA stores. It was also in talks to sell a minority stake in the coffee chain's regional business.
