AFC Enterprises Inc., the umbrella company of Popeye's Louisiana Kitchen, has reported a same-store boost in the second quarter 2010, which ended July 11. Much of the momentum comes from the introduction of Popeyes Wicked Chicken.
The earnings were announced Wednesday, when the company also provided an update on its strategic plan. AFC reported a net income of $6.8 million, and earnings of 26 cents per share. This compares to $6.4 million and 25 cents per share in the second quarter of 2009.
Total revenue was down to $34.3 million, compared to $35.7 million last year, primarily due to the re-franchising efforts of a dozen restaurants in the Atlanta area.
Total sales increased 2.8 percent.
"Popeyes delivered another strong earnings quarter driven primarily by positive same-store sales. This performance reflects top-line momentum generated by the introduction of Popeyes Wicked Chicken," said AFC Enterprises Chief Executive Officer Cheryl Bachelder. "We believe our success is also driven by our Strategic Plan."
The stratetic plan is built upon four pillars:
- Build the Popeyes Brand. In April, Popeyes promoted its 2-piece Louisiana tenders with Cajun fries and a buttermilk biscuit for $2.99, supported with national media advertising. The system offered its national Popeyes Pay Day promotion for the second consecutive year. Also, on May 31, Popeyes launched its Wicked Chicken and its Cane Sweeeet Iced Tea.
- Run Great Restaurants. Second quarter year-to-date Guest Experience Monitor, GEM, "% Delighted" scores were at 72 percent, up 7 percentage points from a year ago. "Speed of service" scores were 8 percentage points higher than the third quarter last year when the program was initiated.
- Strengthen Unit Economics. In the second quarter, Popeyes restaurants achieved a 3.5 percent decrease in food costs compared to last year. The improvement was primarily the result of successful renegotiation of vendor contracts, restaurant efficiency initiatives, and declines in commodity costs.
- Ramp Up New Unit Growth. During the first and second quarters, the company opened 34 new restaurants, including two new restaurants in Vietnam and one restaurant in the Cayman Islands. The Company now expects to open 120-130 new restaurants for full year 2010.
