April 30, 2020 / 12:06 AM / a month ago

UPDATE 1-Mexico's Alsea swings to loss in first quarter, hit by coronavirus

(Adds details from earnings report)

By Daina Beth Solomon

MEXICO CITY, April 29 (Reuters) - Mexican restaurant operator Alsea reported on Wednesday a first-quarter net loss of 390 million pesos ($16.4 million), slammed by lockdown measures to prevent the spread of the coronavirus that weakened sales across its markets, particularly in Europe.

The company which operates franchises of the coffee chain Starbucks as well as chain eateries such as Chili's and P.F. Chang's, posted net sales of 12.1 billion pesos in the January-to-March period, down 11.5% from the first quarter last year.

Alsea earned 151 million pesos in net profit in the year-earlier period.

Chief Executive Alberto Torrado said sales were minimal in April and that more stores would gradually reopen in May and June, leading to a poor outlook for the next quarter.

"We forecast that the second quarter will be materially worse than the first," Torrado said in a statement accompanying results.

He added, however, that European governments had slowly begun to lift coronavirus restrictions, allowing Alsea to reopen 9% of its eateries in the region. If other countries followed suit, sales could begin to revive in the third quarter, Torrado said.

Despite the drop in sales, home deliveries in Alsea's core Mexican market increased more than 50%, especially for Domino's Pizza.

Alsea also said it planned to keep strengthening such services, including adding "dark kitchens" to exclusively handle deliveries.

"After the crisis, we believe deliveries and online sales will keep growing as clients keep a certain social distance due to ongoing health concerns," Torrado said.

The company will host a call with analysts on Thursday at 9 a.m. (1400 GMT) to discuss results. ($1 = 23.7980 pesos at end-March) (Reporting by Daina Beth Solomon and Noe Torres; Editing by Peter Cooney)

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