News
Pollo Tropical, Taco Cabana comps down in Q2
August 3, 2009
Carrols Restaurant Group Inc., parent company of Carrols Corp., has reported that same-store sales decreased for its Burger King franchise stores as well as its fast casual brands for the second quarter ended June 28.
Comps were down 3.1 percent at Pollo Tropical, 3.8 percent at Taco Cabana and 4.7 percent at its Burger King stores.
Revenue
Revenues were down 3.2 percent to $203.9 million compared with $210.7 million in the same period last year. Revenues from the company's fast casual brands decreased 0.4 percent to $108.4 million compared to $108.8 million in the same period last year.Pollo Tropical revenues were $44.6 million compared to $45.4 million in the same period last year. The decline in comparable restaurant sales was substantially offset by the net increase of five new Pollo Tropical restaurants opened since the beginning of the same period in 2008.
Taco Cabana revenues increased 0.6 percent to $63.8 million during the second quarter of 2009 compared to $63.4 million in the same period last year, reflecting the opening of 12 new Taco Cabana restaurants since the beginning of the same period in 2008.
Burger King revenues were down 6.2 percent to $95.5 million, compared to $101.8 million in the same period last year. This reflected the net closing of eight Burger King restaurants since the beginning of the same period in 2008.
Year to date, revenues were down 0.3 percent to $405.3 million from $406.4 million in the same period last year.
Net income
Net income more than doubled, to $7.1 million compared to net income of $3.3 million last year. Year to date, net income increased to $12.1 million, compared to $4.7 million last year.
Outlook
Alan Vituli, chairman and CEO of Carrols Restaurant Group Inc. credited the company's focus on cost containment, reductions in general and administrative costs and lower interest expense due to reductions in outstanding indebtedness and lower interest rates for the increase in income.
The company also experienced an easing of commodity and utility costs, a shift in some advertising spending from the first to second half of the year compared to 2008 and a $600,000 insurance recovery related to Hurricane Ike.
"While significant pressures on consumer spending, coupled with aggressive marketing and promotional activity across the industry, negatively impacted our top-line, we experienced a significant improvement in profitability," Vituli said. "Overall, we believe that our focus on cost reduction has helped us navigate through the current economic cycle reasonably well. However, in an effort to drive sales, we have substantially increased product development activity at our Hispanic brands and are intently focused on improving comparable restaurant sales in the face of aggressive promotional activity in our industry."
As of June 28, 2009, the company owned and operated 559 restaurants, including 314 Burger King, 91 Pollo Tropical and 154 Taco Cabana restaurants.
The company provided the following revised guidance, noting that 2009 is a 53-week fiscal period, whereas 2008 was a 52-week fiscal period:
- A more modest revenue increase of approximately 1.0 percent to 1.5 percent for the year reflecting first half 2009 results, more difficult sales trends at Burger King and Taco Cabana and anticipated improvements at Pollo Tropical compared to the first half of 2009
- New unit openings of one to two Pollo Tropical restaurants and three to four Taco Cabana restaurants, along with the closing of two Taco Cabana restaurants and one Pollo Tropical restaurant
Conference call
The company will host a conference call to discuss the second quarter 2009 financial results today at 4:30 p.m. Eastern time. The conference call can be accessed live over the phone by dialing (877) 941-8601 or for international callers by dialing (480) 629-9810. A replay will be available one hour after the call and can be accessed by dialing (800) 406-7325 or for international callers by dialing (303) 590-3030; the passcode is 4120876. The replay will be available until Aug.10, 2009. The call will be webcast live from the company's Web site at www.carrols.com, under the investor relations section.
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