News

Del Taco reports 15 consecutive quarters of growth

May 3, 2016

Del Taco Restaurants reported that its system-wide comparable restaurant sales increased 3.2 percent, and company-owned comparable restaurant sales were up 2.8 percent during Q1, marking the 10th and 15th consecutive quarter of gains, respectively, according to a company press release.

"We achieved solid quarterly results and are on track to deliver on our fiscal year outlook,” said Paul J.B. Murphy III, president and CEO. "The Del Taco system extended its record of system-wide comparable restaurant sales growth to ten consecutive quarters with a 3.2 percent gain, in spite of significant competitive discounting and cycling over a 7.7 percent increase in the prior-year."

He said the company also generated restaurant contribution margin expansion at company-owned units through favorable menu mix shifts and effective menu price increases, which helped offset cost pressures, including the California minimum wage increase to $10 per hour.

"Our ability to operate effectively in this environment is a testament to the strength and resiliency of our brand, our positioning, and our menu strategy," he said.

Del Taco, which became a public company when it completed a business combination with Levy Acquisition Corp. on June 30, 2015, reported the following Q1 highlights:

• Company-owned comparable restaurant sales growth comprised check growth of 5.4 percent, including over 1 percent of menu mix growth and a transaction decrease of 2.6 percent.
• Total revenue of $97.4 million, representing 3.2 percent growth.
• Restaurant sales of $93.6 million, representing 2.9 percent growth.
• Restaurant contribution margin, a non-GAAP financial measure, of 18.7 percent, an improvement of approximately 10 basis points from the fiscal first quarter of 2015.
• Net income increased to $3.1 million from a net loss of $4.9 million in the fiscal first quarter of 2015, representing diluted earnings (loss) per share of $0.08 and ($1.21) in the fiscal first quarter of 2016 and 2015, respectively.
• Adjusted EBITDA, a non-GAAP financial measure, of $13.1 million compared to $13.2 million in the fiscal first quarter of 2015
• The opening of two restaurants.

Del Taco plans to launch its "fresh combined solutions" strategy in June to improve speed and quality, expand usage occasions and differentiate the brand with new Mexican food platforms, Murphy said.

"Driving brand reappraisal by aligning improved guest experiences with an elevated brand promise will help drive higher quality and freshness perceptions and move us toward our average unit volume goal of $1.5 million by 2018," he said.