Americana profit tumbles as Gaza boycotts hit sales

Alamy

• Revenue down 16% in Q1 2024
• Net profit down 51% to $28m
• Runs 2,456 fast-food outlets in Mena

Americana Restaurants International’s revenue and profit fell again in the first quarter of this year as Mena diners continue to shun western brands in protest at the conflict in Gaza.

Americana, which runs 2,456 fast-food outlets across the region, reported a 16.3 percent reduction in revenues year on year, to $493.5 million. 

Net profit fell even more sharply, from just over $58 million in the first quarter of 2023 to $28 million in Q1 this year – a drop of more than 51 percent.

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Its quarterly revenues had fallen by 15 percent in Q4 2023. Sales at KFC, which represents about two-thirds of its total revenue, were down 18 percent in the fourth quarter.

The company, whose other brands include Pizza Hut and Krispy Kreme, attributed the drop in sales to “ongoing geopolitical tensions in the region, as well as the seasonal effect of Ramadan period”.

It also pointed to the costs of opening 37 outlets in the first quarter and said it planned to expand by “opening stores in markets which are less impacted by the regional macro-environment”. 

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Americana, which aims to open 200-225 restaurants in total this year, is listed in Abu Dhabi and Saudi Arabia. Its shares fell on both exchanges on Tuesday morning. 

On Saudi Arabia’s bourse, its shares were down 4.5 percent at 7:46am GMT (10:46am local time) – their lowest level since February 14.

In Abu Dhabi, Americana shares were down 4 percent to AED3.12 at 7:49am GMT (11:49am local time). The stock has fallen 31 percent since last September’s all-time high. 

Americana’s KFC and Pizza Hut outlets are being targeted for boycotts in part because Yum! Brands, the chains’ parent company in the US, has invested in Israeli startups.

Yum! CEO David Gibbs said in February that its “top-line sales were impacted by the conflict in the Middle East region” in various markets.

Starbucks and McDonald’s have also attributed weak sales to the conflict.