AUS
NZ
UK
CA
USA
IND
Highlights:
- Sales Recovery: Tortilla reported a revenue decline but achieved improved like-for-like sales growth by September.
- Expansion Strategy: The company is revamping offerings and expanding through franchises, with a new central kitchen set to open in France.
- Positive Outlook: Tortilla aims to enhance operations and align with forecasts by leveraging technology and improving delivery partnerships.
Tortilla Mexican Grill PLC (LSE:MEX) reported a mixed performance in its latest half-year results, highlighting an ongoing transformation strategy despite a decline in revenues. The Tex-Mex chain noted a significant change in its sales momentum, with like-for-like (LFL) sales improving from a decrease of 6% year-on-year in March to a growth of 4% in September.
Chief Executive Andy Naylor stated that the UK operations had lost traction at the beginning of the year, necessitating substantial strategic adjustments. This transformation involved revamping the food offerings, increasing store openings—particularly through franchise partnerships—and enhancing operations abroad. Currently, the chain operates a total of 89 outlets, reflecting its commitment to expansion.
For the six months ending in June, Tortilla reported revenues of £31.5 million, a decline from £32.7 million during the same period in 2023. The interim loss narrowed to £0.2 million compared to a loss of £0.6 million the previous year. The primary contributor to the revenue decrease was a 10.3% decline in LFL delivery sales, a result of strategic changes. However, delivery profitability improved by £0.5 million, indicating positive adjustments within that segment.
In addition to these developments, Tortilla emphasized that trading is on track to align with forecasts in the coming weeks. A central kitchen is set to open in France during the fourth quarter, and the first three locations in Strasbourg are expected to be operational shortly thereafter. This expansion into the French market represents a key milestone for the company as it seeks to broaden its footprint in international markets.
The company remains focused on leveraging technology and enhancing delivery partnerships to optimize its operations and customer experience. By implementing these strategies, Tortilla aims to solidify its position in the competitive casual dining sector.
As Tortilla navigates this transitional phase, the commitment to adapting its business model and offerings will be pivotal in achieving sustained growth. The company’s strategic initiatives reflect a proactive approach to addressing market challenges and seizing opportunities for improvement within its operations. The Tex-Mex dining scene's evolving landscape presents challenges and prospects, and Tortilla is positioning itself to capitalize on the momentum gained through recent changes.
