Restaurants

Increasing Earnings Transparency
Situation

This multinational company saw earnings drop a year after going public, as weakening foreign currencies translated into lower U.S. dollar results, and analysts struggled to discern the underlying performance of the Company.

Strategy & Tactics

  • We researched comparable companies with operations in multiple countries and spoke with relevant sell-side analysts to expand the key metrics disclosed by the Company.

  • We then advised the Company to disclose and highlight organic results, through stripping out the impact of foreign exchange and special items, in order for the financial community to better assess its core performance.

  • The release was restructured and focused CEO commentary on organic results in order to direct investors to the most relevant metric.

Results
  • The revised structure allowed investors to see that underlying results had improved, despite a 23% year-over-year depreciation in the main operational currency.
  • Both analysts and the media positively received the restructuring of the earnings release, resulting in a heavier discussion of the underlying operating performance and the impact of currency movements on results.