Restaurant conglomerate MTY Food Group Inc. has postponed its next earnings report, originally scheduled for next week, because of recent allegations by a whistle-blower.
Chief executive officer Eric Lefebvre would not provide details of the allegations, but said in an e-mail that the company will communicate more information when it publishes its fourth-quarter results. The Montreal-based company called the allegations, which were made by an employee, “baseless and frivolous” in a release announcing the postponement Friday.
It did not provide a new date for the earnings report, which had been scheduled for Tuesday, but said it would occur by the regulatory deadline of Feb. 28.
MTY owns a large portfolio of mostly quick-service restaurants, including coffee shops Country Style, Timothy’s and Van Houtte; food court staples Manchu Wok, Tiki-Ming, Thai Express and Jugo Juice; frozen dessert shops Pinkberry, Tasti D Lite, Cold Stone Creamery and La Diperie; and burger restaurants Big Smoke Burger, South Street Burger and The Works.
MTY’s stock fell more than 8 per cent after the news Friday. The stock’s decline suggests that some investors expect that the allegations could be serious. While most analysts left their target prices and recommendations on the stock unchanged, Derek Lessard at TD Securities withdrew both.
“The whistleblower allegations could turn out to be material or not. However, given that we do not know the nature of the allegations and the delay in reporting quarterly results, we are putting our current recommendation under review and suspending our target price,” Mr. Lessard said in a note.
Prior to the change, the analyst had a “hold” recommendation on the stock and a 12-month target price of $60.
With files from David Berman
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