YO! Sushi strategic review takes a bite out of profits but sales rise

 
Alys Key
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The 8th Annual New York Culinary Experience Presented By New York Magazine And The International Culinary Center - Day 2
YO! Sushi underwent a review of operations last year (Source: YO!)

YO! Sushi managed to push up like-for-like sales last year, but profits fell slightly as the brand underwent a strategic review.

The figures

Total sales grew six per cent to £88.4m, up from £83.7m.

But underlying earnings were £10.8m after the brand heavily reinvested in a "refresh". Last year earnings were £11.3m.

But like-for-like sales grew 5.5 per cent across the year, above the industry average.

Why it's interesting

The results represent the first full year of accounts following YO!'s sale to Mayfair Equity Partners in November 2015. The subsequent "reset" year has involved a strategic review "to refresh the brand, re-energise YO!’s people and best position the group for future growth".

The new menu design and logo which regular YO! Sushi diners may have noticed were part of this, as were investments in IT systems and the addition of new senior management roles.

The chain's founder Simon Woodroffe, who sold his stake in the company but retains a one per cent royalty, told City A.M. he today he thought management was doing the right thing by refreshing the business.

"When I started YO! Sushi 20 years ago there weren't many restaurants," he said. "It was basically us and Wagamama. Now, the competition is incredibly high, especially in casual dining where there's so much choice. lt must dissipate the spend there is for individual restaurants."

A saturated casual dining market has led several restaurant groups to warn on profits this year. Most recently Franco Manca owner Fulham Shore's shares dropped 22 per cent after a gloomy trading update.

Woodroffe also said he was not concerned by smaller profits as long as the brand had longevity. "I've always had the view that you just need to stay in business for a longer amount of time. So what if you have slightly less of a profit?"

What YO! said

YO! CEO Robin Rowland said: “2016 was transformational for YO! Following a full strategic review with our new owners, Mayfair, we’ve reset the business to best position it for long term future growth. This has been reflected in 5.5 per cent like-for-like sales growth for the last 12 consecutive months. We now have the people and product to take the business forward, and 2017 will be about taking advantage of the significant opportunities that now exist for the brand.”

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