ATLANTA, 2016-Aug-22 — /EPR Retail News/ — Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI), the franchisor and operator of Popeyes® restaurants, today (August 16, 2016) reported results for its fiscal second quarter of 2016, which ended July 10, 2016. The Company also reaffirmed earnings guidance for fiscal 2016.
“The second quarter was a productive one for Popeyes on each of our three strategic pillars, despite the competitive pressures on comparable sales,” said Cheryl Bachelder, Popeyes Chief Executive Officer. “We have continued to offer our guests a balance of exciting new products and value-oriented promotions, and our share of chicken-QSR grew this quarter. We have successfully implemented our new field visit protocols to advance our operations and we completed the scoping of our One Technology initiative. Our international team is delivering excellent results. So while we are experiencing slower domestic sales, consistent with the sector; we remain highly confident that our bold long term goals are achievable.”
Second Quarter 2016 Highlights:
- Total revenues increased 3.9% to $61.7 million, compared to $59.4 million in the second quarter of 2015.
- Reported net income was $10.3 million, or $0.47 per diluted share, compared to $10.3 million, or $0.44 per diluted share in the second quarter 2015. Adjusted earnings per diluted share(1) was $0.47, compared to$0.44 in 2015. Both earnings per diluted share and adjusted earnings per diluted share had a year over year growth of 6.8%.
- Total system-wide sales increased by 6.5% in the second quarter 2016 as a result of net unit growth and same-store sales performance.
- Global same-store sales increased 0.7%.
- Total domestic same-store sales were flat, compared to a 7.9% increase in the second quarter of 2015.Popeyes increased its domestic market share of the chicken-QSR category to a record high 26.6%, compared to 25.4% in the second quarter of 2015.
- International same-store sales increased 6.4%, compared to a 4.3% increase in the second quarter of 2015, marking the 26th consecutive quarter of positive international same-store sales growth.
- Sales by Company-operated restaurants were $25.2 million in the second quarter compared to $25.1 million last year. Company-operated restaurant operating profit(1) was $4.7 million, or 18.7% of sales, compared to$4.9 million, or 19.5% of sales in the second quarter of 2015. The decrease was primarily due to lower sales in our new markets along with higher labor costs, which were partially offset by lower chicken and grocery basket costs.
- Operating EBITDA(1) was $19.8 million, or 32.1% of total revenue in the second quarter, compared to $19.5 million, or 32.8% of total revenue last year. The increase was primarily due to an increase in franchise royalties and fees partially offset by a planned increase in general and administrative expenses to support the Company’s new strategic roadmap along with a decrease in Company-operated restaurant operating profit.
- Through the first 28 weeks of fiscal 2016, free cash flow(1) was $23.6 million, compared to $19.6 million in 2015.
- The Popeyes system opened 43 restaurants, which included 23 domestic and 20 international restaurants. Net restaurant openings were 36 compared to 31 in the same period last year.
- As of the end of the second quarter, the Company operated and franchised 2,594 restaurants, compared to 2,443 at the end of the second quarter in 2015, representing a net unit growth of 6.2% over the last twelve months.
- The Company repurchased 532,864 shares of its common stock for approximately $30 million.
Fiscal 2016 Guidance:
Based on performance through the second quarter, the Company is making the following adjustments to guidance for the full-year fiscal 2016:
- System-wide same-store sales growth in the range of 1.0% to 2.0%, a decrease from previous guidance in the range of 2.0% to 3.0%.
- Two new Company-operated restaurant openings, a decrease from previous guidance of three to five.
In addition, the Company reiterates the following guidance for full year fiscal 2016:
- New restaurant openings in the range of 200 to 235, including approximately 85 to 100 internationally.
- Net new restaurant openings in the range of 140 to 185, for a net new unit growth rate of approximately 6% to 7%.
- General and administrative expenses to be approximately 2.9% to 3.0% of system-wide sales, maintaining an investment rate that supports long-term growth.
- Capital expenditures to be in the range of $10 million to $15 million, including approximately $10 million for new Company-operated restaurants and other capital improvements at existing restaurants.
- Earnings per diluted share and adjusted earnings per diluted share to be in the range of $2.10 to $2.15.
- Share repurchases of $80 million to $120 million in outstanding shares, compared to $62 million in 2015, with$60 million purchased from operating cash flows and up to $60 million from additional borrowings.
- Effective income tax rate in 2016 to be approximately 38%.
The Company will host a conference call and Internet webcast at 9:00 A.M. ET on August 17, 2016, to review second quarter 2016 results. A live listen-only webcast of the conference call will be available on the Popeyes website at www.popeyes.com/investors. The conference call can also be accessed live over the phone by dialing (855) 427-4392 or for international callers by dialing (484) 756-4257. A replay will be available after the call and can be accessed by dialing (855) 859-2056, or for international callers by dialing (404) 537-3406; the conference ID is 41416512. The replay will be available until Wednesday, August 31, 2016. A replay of the conference call will also be available for 90 days at the Company’s website.
Popeyes Louisiana Kitchen, Inc. is the franchisor and operator of Popeyes® restaurants, the world’s second-largest Quick- Service Restaurant (“QSR”) chicken concept based on number of units. As of July 10, 2016, Popeyes had 2,594 operating restaurants in the United States, the District of Columbia, three territories, and 26 foreign countries. The Company’s primary objective is to deliver sales and profits by offering excellent investment opportunities in its Popeyes brand and providing exceptional franchisee support systems and services to its owners. Popeyes Louisiana Kitchen, Inc. can be found at www.popeyes.com.
(1) Adjusted earnings per diluted share, operating EBITDA, Company-operated restaurant operating profit, and free cash flow are supplemental non-GAAP measures of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”
Popeyes Louisiana Kitchen, Inc.
Vice President, Brand Communications
Source: Popeyes Louisiana Kitchen, Inc.