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 4.7 percent at its Burger King stores, 3.1 percent at Pollo Tropical and 3.8 percent at Taco Cabana.
Revenues were down 3.2 percent to $203.9 million compared to $210.7 million in the same period last year. 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.
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.
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 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 $0.6 million 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.
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.
Burger King outlook
Carrol Restaurant Group's results may be a signal of Burger King Corp.'s fourth quarter results, which are scheduled to be released Aug. 25 at 10 a.m. Eastern time. Burger King has experienced falling sales since March, when it focused on its premium burgers. A shift to value messaging in June may not have been enough to boost sales for the year.
