Operations

Del Taco turns in lukewarm Q3 results

Photo: Del Taco/File

October 16, 2020

Del Taco's Q3 2020 results failed to impress investors, who pulled back in after-hours trading Thursday following the release of the Lake Forest, California-based QSR's quarterly financial figures.

The good news is that the company's Q3 profit grew to $5.8 million or 15 cents per share, compared to a loss of $7.7 million or 21 cents per share during the same period last year, according to the quarterly report. Revenues grew just slightly, up 0.5% to $120.8 million from $120.2 million a year ago.

Additional results for the 12 weeks that ended on Sept. 8 include:

4.1% system comp sales growth.
1.4% drop in company-operated restaurant sales of $109.5 million, from the previous year's period, attributed to fewer open stores.
Increased adjusted net income from $3.7 million or 10 cents per diluted share in Q3 2019 to $6 million, or 16 cents per diluted share this year's quarter.
Restaurant contribution margin grew from 16.8% last year's quarter to 18% this year.
Adjusted EBITDA grew from $14.5 million last year's quarter to $15.3 this year.
Openings of four franchised and one company store.
Closing of two franchised units.

"Positive third-quarter comparable restaurant sales for company-operated and franchised restaurants reflects our value-oriented QSR-plus positioning, expanding off-premise convenience and use of innovation with the very successful launch of new fresh Guacamole and our Crispy Chicken menu," Del Taco President and CEO John D. Cappasola, Jr., said in the report. "We also drove operational efficiencies and maintained our cost discipline to help slightly expand our restaurant contribution margin after adjusting for the timing of advertising expense which will normalize during our fourth quarter. …

"Looking ahead to 2021, we plan to elevate our brand engagement and transform our digital capability through a holistic CRM platform to incentivize and reward our fans, and launch our 'Ultimate Convenience' initiative to expand our access and convenience through new technology."

Del Taco has approximately 600 restaurants in 15 states.