A&W Food Services of Canada Inc. (TSX: AW) ("A&W", "Food Services", "we" or "our") today announced its financial results for the 12 and 36-week periods ended September 7, 2025.

All references to "Q3 2025" are to Food Services' 12-week period ended September 7, 2025, to "YTD 2025" are to Food Services' 36-week period ended September 7, 2025, to "Q3 2024" are to Food Services' 12-week period ended September 8, 2024 and to "YTD 2024" are to Food Services' 36-week period ended September 8, 2024. The fiscal 2025 year is 52 weeks and ends on December 28, 2025 ("Fiscal 2025").

"We are pleased to report our third consecutive quarter of positive Same Store Sales Growth, a significant achievement amidst a challenging macroeconomic environment which continues to create headwinds for sales at A&W restaurants" announced Susan Senecal, Chief Executive Officer. "The Q3 2025 Same Store Sales Growth(i) of 1.4% is a reflection of a positive response to A&W's marketing campaigns and value offerings, which have resonated with guests who are looking for both great taste and value," added Ms. Senecal. "Through the first three quarters of 2025, we've achieved System Sales Growth(i) of 2.9% which is attributed to both the positive Same Store Sales Growth and the opening of new A&W restaurants which is supported by our partnership with Suncor."

Q3 FINANCIAL HIGHLIGHTS

For Q3 2025, compared to Q3 2024

SUMMARY OF RESULTS

On October 17, 2024, A&W completed a transaction (the "Transaction") in which Food Services indirectly acquired the trademarks used in the A&W business in Canada through the acquisition of all of the units of A&W Revenue Royalties Income Fund (the "Fund") which it did not already own. Due to the Transaction, the financial results for Q3 2025 are not directly comparable to the financial results for Q3 2024.

For further information regarding the Transaction, please refer to Food Services Q3 2025 Management's Discussion and Analysis ("MD&A") and Food Services' Annual MD&A for the 52-week period ended December 29, 2024, both of which are available on Food Services' SEDAR+ profile at www.sedarplus.ca., as well as the Fund's management information circular dated August 29, 2024 available on the Fund's SEDAR+ profile at www.sedarplus.ca.

Q3 2025 Results Compared to Q3 2024Total revenue decreased by $4.8 million primarily due to a difference in the timing of restaurant openings. There were seven fewer openings in Q3 2025 compared to Q3 2024, as the timing of restaurant openings is subject to various factors and fluctuates each quarter. New restaurant openings impact the revenue generated from the sale of equipment and the revenue associated with turnkey restaurants and as such the lower number of openings in Q3 2025 led to a reduction in those streams of revenue, when compared to Q3 2024.

System Sales(i) increased 3.1% in Q3 2025 (0.4% in Q3 2024) due to an increase in the number of A&W restaurants and the 1.4% Same Store Sales Growth(i) achieved in Q3 2025. Revenue from service fees, contributions to the National Advertising Fund ("NAF") and revenue generated from the distribution of food and supplies fluctuate with the movement in System Sales and as such, were up quarter over quarter and partially offset the decrease in revenue related to new restaurant openings. The increase in service fee revenue also reflects the continuing migration of A&W restaurants from a 2.5% to a 3.5% service fee rate, leading to a higher weighted average service fee rate and margin expansion in Q3 2025.

Same Store Sales Growth(i) for Q3 2025 was 1.4%, due to an increase in both average cheque size and guest counts. The growth in guest counts demonstrates the ongoing success of our marketing campaigns, which we began to see positive impacts from in Q1 2025 and reflects the attractiveness of our value offerings in the current consumer market, including our Value Deals menu, which was introduced in Q3 2025 and features a variety of menu items priced under $4.00. The increase in average cheque size is partially attributed to industry-wide inflation affecting goods, services, and labour. Same Store Sales Growth is impacted by shifts in guest counts, cheque size (including party size, menu prices, and menu mix), and changes in consumer discretionary spending. On August 21, 2025 we held our 17th annual Burgers to Beat MS Day, an annual campaign where $2.00 from every Teen Burger sold is donated to MS Canada.  We celebrated another successful campaign and surpassed the number of Teen Burgers sold during the 2024 campaign.

Income before income taxes increased by $14.6 million in Q3 2025 largely as a result of the cessation of the royalty expense following the completion of the Transaction and also due to a decrease in operating costs, partially offset by a decrease in revenue and an increase in net finance expense and loss on interest rate swap as well as the cessation of the income from associates and amortization of deferred gain following completion of the Transaction. In Q3 2025 the NAF's contributions exceeded its expenses by $4.5 million whereas in Q3 2024, the NAF's expenses exceeded its contributions by $3.3 million resulting in a $7.8 million quarter over quarter variance in net income before taxes due to the timing of expenses incurred by the NAF. The remaining decrease in operating costs is correlated with the decrease in revenue discussed above and is due to seven fewer new A&W restaurants opened in the quarter.

Food Services reported net income per share of $0.71 ($0.71 per diluted share) in Q3 2025 versus net income per share of $0.42 ($0.42 per diluted share) in Q3 2024 due to the increase in income attributable to shareholders of Food Services, partially offset by the weighted average number of shares outstanding increasing as a result of the Transaction and the issuance of stock-based compensation.

In order to improve comparability of net income per share, the number of shares used to calculate the net income per share for Q3 2024, has been adjusted to reflect the equivalent number of common shares of Food Services that were outstanding after the reorganization that was undertaken as part of the Transaction.

Adjusted EBITDA(i) increased by $1.1 million to $25.8 million ($24.7 million in Q3 2024) largely due to decrease in operating costs, excluding items such as NAF expenses that are added back for the purposes of calculating Adjusted EBITDA as it represents a timing difference between advertising expenditures and NAF contributions. The decrease in operating expenses was partially offset by the decrease in revenue, however, on a net basis it reflects an increase in margin that was driven by the growth in System Sales. Adjusted EBITDA Margin(i) increased from 32.5% in Q3 2024 to 36.2% in Q3 2025.

On September 2, 2025 Food Services declared a cash dividend of $0.480 per share and remains committed to maintaining such level of quarterly dividends for the foreseeable future.

YTD 2025 Results Compared to YTD 2024Total revenue increased by $2.0 million to $201.1 million which was driven by the 2.9% increase in System Sales(i) (1.3% for YTD 2024) which reflects an increase in the number of A&W restaurants and YTD 2025 Same Store Sales Growth(i) of 1.3% that is attributable to an increase in the average cheque size. Same store guest counts are consistent with YTD 2024 due to a slight decline in same store guest counts in Q1 2025 which was attributed to severe weather in certain geographical regions being offset by positive guest count growth in Q2 2025 and Q3 2025 due to the success of our marketing campaigns. Revenue from service fees, contributions to the NAF and revenue generated from the distribution of food and supplies fluctuate with the movement in System Sales and as such, were up year over year. The increase in service fee revenue also reflects the migration of A&W restaurants from a 2.5% to a 3.5% service fee rate, leading to a higher weighted average service fee rate and margin expansion. The increases were partially offset by a decrease in revenue related to new restaurants as Food Services has opened five fewer new A&W restaurants in YTD 2025 as compared to YTD 2024. The timing of restaurant openings is subject to various factors and fluctuates each quarter.

Income before income taxes increased by $24.3 million largely as a result of the cessation of the royalty expense following the completion of the Transaction, an increase in revenue and a decrease in operating costs and general and administrative expenses. These increases were partially offset by an increase in the loss on interest rate swap and net finance expense as well as the cessation of the income from associates and amortization of deferred gain following completion of the Transaction.

Food Services reported net income of $39.3 million in YTD 2025 compared to net income of $22.8 million in YTD 2024 due to the factors discussed above and a $7.7 million increase in income tax expense due to an increase in taxable income which is largely due to the cessation of the royalty expense following completion of the Transaction. The amortization of deferred gain and income from associates recognized in YTD 2024 were not taxable and therefore diluted the effective tax rate in YTD 2024.

Food Services reported net income per share of $1.59 ($1.59 per diluted share) in YTD 2025 versus net income per share of $1.51 ($1.51 per diluted share)  in YTD 2024 due to the increase in income attributable to shareholders of Food Services, partially offset by the weighted average number of shares outstanding increasing as a result of the Transaction and the issuance of stock-based compensation.

In order to improve comparability of net income per share, the number of shares used to calculate the net income per share for YTD 2024, has been adjusted to reflect the equivalent number of common shares of Food Services that were outstanding after the reorganization that was undertaken as part of the Transaction.

Adjusted EBITDA(i) increased by $5.2 million to $70.7 million ($65.5 million for YTD 2024) due to the increase in revenue and decrease in operating costs general and administration expenses (excluding depreciation, NAF related expenses and other items included in general and administration expenses and operating costs that are added back for the purposes of calculating Adjusted EBITDA). Adjusted EBITDA Margin(i) increased from 32.9% in YTD 2024 to 35.2% in YTD 2025.

Full quarterly results are available on Food Services' SEDAR+ profile at www.sedarplus.ca.

2025 OUTLOOKFood Services' annual financial guidance for Fiscal 2025, along with its underlying assumptions, remains consistent with the ranges announced on May 2, 2025:

CONFERENCE CALLA&W will hold a conference call to discuss its Q3 2025 results on Friday, October 17, 2025 at 1:00 p.m. Pacific Time (4:00 p.m. Eastern Time).

The call will be webcast live and may be accessed at https://events.q4inc.com/attendee/798309984. Participants who wish to ask questions will need to register in advance of the conference call using the following link: https://events.q4inc.com/analyst/798309984?pwd=%3DWRo%402d5.

For those unable to attend the live call, a replay will be made available for one year at https://events.q4inc.com/attendee/798309984.

NON-IFRS MEASURESThis news release makes references to certain non-IFRS measures. These measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective.  Food Services believes that disclosing these non-IFRS measures provides readers of this news release with important information regarding Food Services' financial performance. By considering these measures in combination with IFRS measures, Food Services believes that readers are provided with additional and more useful information about Food Services than readers would have if they simply considered IFRS measures alone. We use non-IFRS financial measures including "System Sales", "EBITDA", and "Adjusted EBITDA"; the non-IFRS ratios of "System Sales Growth" and "Adjusted EBITDA Margin" and non-IFRS supplementary financial measures such as "Same Store Sales Growth".

These non-IFRS measures, ratios and supplementary financial measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. A&W's management also uses non-IFRS measures and industry metrics to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The non-IFRS measures reported by Food Services do not have a standardized meaning prescribed by IFRS and Food Services' method of calculating these measures may differ from those of other issuers or companies and may not be comparable to similar measures used by other issuers or companies.  Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS.

Certain information, including definitions, about non-IFRS financial measures, non-IFRS ratios, and supplementary financial measures is found in Food Services' Q3 2025 MD&A (and, in the case of Fiscal 2024 results, in Food Services Q4 2024 MD&A) and is incorporated by reference. This information is found in the sections entitled "How We Assess the Performance of our Business", "Non-IFRS Measures" and "Selected Financial Information" of Food Services' Q3 2025 MD&A (and, in the case of Fiscal 2024 results, in Food Services' Q4 2024 MD&A) which is available on Food Services' SEDAR+ profile at www.sedarplus.ca. Reconciliations for each non-IFRS financial measure can be found below.

FORWARD-LOOKING INFORMATIONCertain statements in this news release contain forward-looking information within the meaning of applicable securities laws in Canada. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would", "outlook" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words.

The forward-looking information in this news release includes but is not limited to: the expectations that Food Services will continue to pay dividends at the current level; and Food Services' 2025 outlook.

The forward-looking information, including the 2025 outlook, is based on assumptions that management considered reasonable at the time it was prepared, which assumptions include, but are not limited to:

Inherent in forward-looking information are risks and uncertainties beyond management's or Food Services' ability to predict or control that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. The forward-looking information in this news release is subject to risks, uncertainties and other factors including, among others, the risks identified in Food Services' Q3 2025 MD&A and Food Services' annual information form for the period ended December 29, 2024, ("AIF") under the heading "Risk Factors".  The Q3 2025 MD&A and AIF are both available on Food Services' SEDAR+ profile at www.sedarplus.ca. Additional risks and uncertainties not currently known to Food Services or that are currently not considered to be material also may impair Food Services' business.

All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as required by law, Food Services undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.

INVESTOR COMMUNICATIONSFor important updates and information regarding A&W, including the timing of future earnings calls, visit A&W's investor relations website at www.awinvestors.ca. A&W uses this website as a primary channel for disclosing key information to its investors.

ABOUT FOOD SERVICESA&W is a publicly traded company and is the second largest quick-service hamburger restaurant chain in Canada. Operating coast-to-coast, A&W restaurants feature famous trade-marked menu items such as The Burger FamilyÂR, Chubby ChickenÂR and A&W Root BeerÂR. A&W's shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "AW".

SOURCE A&W Food Services of Canada Inc.

SOURCE: A&W Food Services of Canada Inc.

For further information: Kelly Blankstein, Chief Financial Officer, 604-988-2141,
Email: investorrelations@aw.ca, www.awinvestors.ca

COMTEX_469584479/2197/2025-10-17T07:00:00