A&W posts Q1 for 2026
A&W’s first-quarter results for 2026 show a split between regional markets, according to Chief Executive Officer Susan Senecal. While the brand remains strong, local challenges slowed growth early in the year.
Sales performance
Across Canada, sales at existing restaurants fell slightly by 0.4%. This was due to a divide between the eastern Canada and western Canada locations:
Sales grew as more customers visited restaurants in western Canada. Senecal noted that marketing and value deals are still hitting the mark with western Canadians.
Sales dropped in eastern Canada, largely because of severe weather that forced temporary closures and blocked delivery services.
Market factors
Results in the East were also compared to the same period last year, which benefited from a one-time federal tax holiday. In Ontario, the company is dealing with shifting demographics and a shaky economy.
"Our restaurants in the west achieved growth in guest counts and outperformed the market, giving us confidence that our strategic marketing and value-oriented offerings continue to resonate with Canadians," explained Senecal. "Conversely, A&W restaurants located in the eastern provinces experienced a decline in guest counts which was primarily driven by severe weather events that forced temporary closures and hindered guest access to restaurants and delivery services. The weather events, alongside the non-recurrence of last year's federal tax holiday, created marked differences in quarter over quarter sales growth in the eastern provinces."
Expansion plans
The company is also growing its Pret A Manger brand. A&W has signed leases for several new spots and plans to open three or four franchised locations by the end of 2026.
Total revenue dropped 3% to $59.4 million in the first quarter of 2026, down from $61.1 million during the same period last year.
Revenue and sales
The dip was mainly due to having three fewer new restaurant openings than in Q1 2025. This led to lower sales of kitchen equipment and fewer "turnkey" restaurant deals.
However, other revenue areas grew, including advertising funds, supply distribution and service fees. Service fee revenue rose because more restaurants moved to a higher fee rate of 3.5%, up from 2.5%.
Overall system sales grew 1.5% because there are more A&W locations now than a year ago. However, this growth was dampened by a 0.4% drop in same-store sales.
Challenges in Ontario
Ontario, home to 30% of A&W’s locations, faced specific hurdles:
General consumer uncertainty, trade friction, rising unemployment and slow population growth. Additionally, Q1 2025 benefited from a six-week GST/HST holiday that did not repeat this year.
Revenue from the 12 company-owned spots in Ontario fell 3% to $5.1 million. This was felt most in Ottawa, where government job uncertainty affected the 10 corporate A&W locations. This was slightly offset by the opening of a second corporate Pret A Manger.
Profits and expenses
Pre-tax income rose by $1.2 million. This was driven by a $2.6-million gain on an interest rate swap, lower operating costs and lower debt interest.
These gains were partially offset by:
Spending rose by $0.8 million, mostly for employee pay and stock-based compensation. More resources were added to support the growth of the Pret a Manager brand.
A $1.4-million variance in net income was caused by the timing of advertising fund spending.
