Bojangles' adjusts guidance after rough Q2
Famous Chicken 'n Biscuits fell short on its quarterly earnings in Q2 2018, bringing in just 13 cents per share, well below last year's second-quarter earnings of 23 cents per share. Systemwide comparable restaurant sales also fell 0.2 percent, with company-operated stores dropping 0.8 percent and franchised stores picking up 0.1 percent, according to a news release.
Other key Q2 financial results, include:
- Net income fell from $8.4 million last year's quarter to $2.4 million this year.
- Diluted net income per share fell to 6 cents compared to 22 cents the prior year's quarter.
- The company said it opened five restaurants system-wide during the quarter, including two company-operated restaurants and three franchised restaurants. Likewise, one company-operated store closed and two company-operated stores were refranchised.
"We are ... encouraged that system-wide comparable restaurant sales in the second fiscal quarter of 2018 improved sequentially compared to the first fiscal quarter of 2018 and that our core breakfast daypart strengthened. ..." Bojangles' Interim President and CEO Randy Kibler said in the release.
"We are also optimizing our restaurant portfolio by closing some underperforming company-operated restaurants, refranchising select company-operated restaurants, and slowing system-wide expansion by limiting company development mainly to core markets, while franchise development continues in both the core and adjacent markets. We believe these efforts will positively impact our Adjusted EBITDA and Adjusted Net Income during the remainder of fiscal year 2018 and beyond."
The company said it will close 10 underperforming company-operated restaurants during the third fiscal quarter of 2018, while also expecting to refranchise approximately 30 company-operated restaurants in Tennessee and Georgia to one of its largest franchisees.
Bojangles' has updated its annual outlook for the 52-week period ending on Dec. 30, 2018, to reflect its year-to-date performance and expectations for the remainder of the fiscal year, including:
- Total revenues of $542.0 million to $547.0 million (previously $550.0 million to $560.0 million.
- System-wide comparable restaurant sales of negative low-single digits to flat.
- The opening of 18 to 22 system-wide restaurants (previously 30 to 40).
- Company-operated restaurant contribution margin of 14.5 percent to 15.0 percent (previously 14.0 percent to 14.5 percent).
- Cash capital expenditures of $10.0 million to $11.0 million (previously $11.5 million to $12.5 million).
- Adjusted Diluted Net Income per Share of $0.66 to $0.73 (previously $0.64 to $0.72).
- Adjusted EBITDA of $66.0 million to $70.0 million (previously $64.0 million to $68.0 million).