Wednesday, February 21, 2024

Popeyes reports its first quarter results

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ATLANTA — Popeyes Louisiana Kitchen Inc., the franchisor and operator of Popeyes® restaurants, has reported results for its fiscal first quarter of 2015. The company also increased its earnings guidance for fiscal 2015.

“Popeyes delivered another strong quarter. These results were driven by our menu innovation with Louisiana-inspired food, our compelling messaging and increasing media weights,” said Cheryl Bachelder, Popeyes’ CEO. “Our five pillar strategic roadmap, coupled with excellence in execution, continues to deliver consistent results quarter after quarter. The strength and reliability of our performance gives us confidence in our organic growth opportunities, which include investments in human capital and international expansion.”

The company notes the following first quarter 2015 results:

  • Reported net income was $13.6 million, or 58 cents per diluted share, compared to $11.1 million, or 46 cents per diluted share in 2014. Adjusted earnings per diluted share were 58 cents, compared to 46 cents in 2014, representing an increase of 26.1 percent.
  • Global same-store sales increased 7 percent in 2015 compared to a 4.5 percent increase in 2014 for a two-year compounded growth rate of 11.8 percent. This positive sales growth reflects Popeyes’ continued menu innovation, supported by expanded relevant advertising and strengthened restaurant execution, the company said.
  • Total domestic same-store sales increased 7.1 percent, compared to a 4.3 percent increase last year, for a two-year compounded growth rate of 11.7 percent. Popeyes’ domestic same-store sales have outpaced the chicken QSR (quick service restaurant) segment for 28 consecutive quarters and overall QSR for 14 consecutive quarters, according to independent data. Popeyes has increased its domestic market share of the chicken QSR category to 24.6 percent compared to 22.3 percent last year.
  • International same-store sales increased 6.1 percent, compared to 5.8 percent last year, for a two year compounded growth rate of 12.3 percent.
  • The Popeyes system opened 53 restaurants, which included 29 domestic and 24 international restaurants, compared to 27 total openings in the same period last year. Net restaurant openings were 35, compared to 11 net restaurant openings in the same period last year.
  • As of the end of the first quarter, the company operated and franchised 2,420 restaurants, compared to 2,248 at the end of the first quarter in 2014, representing net unit growth of 7.7 percent during the last twelve months.
  • Total system-wide sales increased by 13.7 percent as a result of same store sales performance and net unit growth of the system.
  • Total revenues increased approximately 13 percent to $79.5 million in 2015 from $70.1 million in the prior year. The $9.4 increase in revenues was primarily due to a $5.3 million increase in sales by company-operated restaurants and a $4.4 million increase in franchise royalties. Sales by company-operated restaurants and franchise royalties were driven by positive same store sales increases and net unit growth.
  • Company-operated restaurant operating profit was $7.5 million, or 21.6 percent of sales, compared to $6 million, or 20.4 percent of sales in 2014. The improvement in company-operated restaurant operating profit margin was primarily attributable to improved labor controls, the company noted. Higher poultry and grocery basket costs were offset by targeted price increases and improved execution.
  • Through the end of the first quarter, operating EBITDA (earnings before interest, tax, depreciation and amortization) was $26.1 million, or 32.8 percent of total revenue, compared to $21.4 million, or 30.5 percent of total revenue, last year, a 22 percent increase.
  • Through the end of the first quarter, free cash flow was $17.7 million, compared to $14.2 million in 2014.
  • The company repurchased 183,847 shares of its common stock for approximately $11.0 million in the first quarter.
  • During 2014, Popeyes domestic freestanding franchised restaurants recorded average restaurant operating profit margins before rent for the fourth quarter and full year of 22 percent and 22.4 percent, respectively, compared to 21.4 percent and 21.6 percent during the same periods in 2013.

For its fiscal 2015 guidance, the notes the following:

  • Global same-store sales growth is expected to be at the top of its original range of 3.5 percent to 4.5 percent, representing a two-year trend of 11 percent across the year.
  • Guidance is being increased on adjusted earnings per diluted share by 1 cent to a new range of $1.84 to $1.89, compared to prior guidance of $1.83 to $1.88.
  • Full-year general and administrative expenses are expected to be approximately 2.9 percent of system-wide sales.
  • New restaurant openings of 200 to 225 and net restaurant openings of 115 to 150, for a system growth rate of approximately 5 percent to 6 percent. Included in this 2015 total are 85 to 95 international restaurants, and 3 to 5 new company-operated restaurants.
  • Capital expenditures of $15 million to $20 million, which includes $12.5 million for company-operated development and relocations.
  • Share repurchases of approximately $40 million to $50 million.

More information can be obtained at www.popeyes.com.

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