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By Sarah Morland
MEXICO CITY (Reuters) -Mexican restaurant and cafe chain operator Alsea posted a 45% fall in fourth-quarter net profit, well below analysts' forecasts, although both core earnings and net sales increased despite a hit to the company's European Starbucks sales.
The company, whose chains include Starbucks, Burger King and Domino's Pizza, earned 575 million pesos ($27.5 million) as net sales rose 11% from the year-ago quarter to 21.66 billion pesos.
Analysts polled by LSEG had expected a net profit of 934.9 million pesos from revenues of 22.06 billion pesos.
The Starbucks business in Europe, which was hit by a boycott movement opposing the war in Gaza, has recovered significantly after losing customers through last year, Alsea said, adding that it expected a continued rebound in 2025.
Starbucks earlier this week announced eliminating some 1,100 corporate jobs as it struggles with falling sales.
"At Alsea, we continue to be firm in our long-term commitment to this market," CEO Armando Torres said in a statement.
In Europe, Alsea's fourth-quarter Starbucks sales shrank 7.4% from a year earlier, while business also slowed at its Mexican Domino's Pizza outlets, the company said.
Alsea operates fast food restaurants and coffee shops in a dozen countries across Europe and Latin America. While more than half of its sales come from Mexico, close to a third come from its businesses in Western Europe.
Alsea said it expects 2025 sales growth in the low double digits, while core earnings should increase by a mid-single digit.
It expects to spend some 6 billion pesos and open 180 to 220 stores through the year, compared to 275 in 2024.
Torres said Alsea's transition to a new CEO was proceeding in an orderly way. The board last month named Christian Gurria, who heads its Starbucks operations in France and the Benelux region, to succeed Torres, starting in July.
($1 = 20.8829 pesos at end-December)
(Reporting by Sarah Morland, Natalia Siniawski and David Alire Garcia; Editing by Kylie Madry and Richard Chang)