News

Popeyes amps up its share of domestic chicken biz to record high

November 10, 2016

Popeyes Louisiana Kitchen, Inc., reported strong forward movement in its Q3 financial results for the period ending Oct. 2. The brand also updated its earnings guidance for the year, and reaffirmed its same-store sales guidance.

Highlights, according to a press release, include: 

• Increased domestic market share of chicken-QSR category nearly a percentage point year over year, to a record high 26.9 percent for Q3 2016, compared to 26.0 percent at the same time last year. 
• Total revenues increased 4.7 percent to $64.0 million, compared to $61.1 million in the third quarter of 2015. This was primarily due to a $2.6 million increase in franchise royalties, $0.7 million increase in company-operated restaurant sales partially offset a drop in franchise fees. The increase franchise royalties resulted from net unit growth and positive same store sales.
• Net income was $10.4 million, or $0.49 per diluted share, compared to $10.6 million, or $0.46 per diluted share for the same quarter last year. Excluding $3.7 million of asset impairment expenses and other non-operating items, Q3 adjusted earnings per diluted share grew 25.5 percent to $0.59 compared to the same period last year. 
• 8.3 percent increase in total system-wide sales for the quarter over last year, due to net new unit growth and positive same-store sales performance.
• 1.8 percent increase in global same-store sales, compared to a 6.0 percent increase for the same period last year, marking the 26th quarter of positive global same-store sales.
• International same-store sales increased 3.7 percent, compared to a 9.1 percent increase in the third quarter of 2015, marking the 27th consecutive quarter of positive international same-store sales growth.
• Opened 24 domestic and 16 international restaurants, compared to 47 total openings last year. 
• Company-operated store sales grew to $26.1 million in the third quarter, up from $25.4 million last year. Company-operated restaurant operating profit was $5.0 million, or 19.2 percent of sales, compared to $4.9 million, or 19.3 percent of sales last year, due to higher sales and lower costs partially offset by higher labor costs.
• Operating EBITDA was $23.8 million, or 37.2 percent of total revenue, compared to $20.3 million, or 33.2 percent of total revenue, in the same period last year, due to $2.2 million more in franchise royalties and fees, $1.2 million less in general and administrative expenses, and $0.1 million more in company-operated restaurant operating profit.

"We are pleased to report strong progress for the quarter," said Popeyes CEO Cheryl Bachelder, in the release. "We continue to expand our brand which has led to the achievement of another record high market share of 26.9 percent. We are firmly on the path of achieving our long term bold growth goals and we are creating value for our franchisees and shareholders."

The brand also made the following adjustments to its guidance for the year: 

• Reported earnings per diluted share in the range of $2.00 to $2.05, compared to the previous guidance of $2.10 to $2.15. The company maintains its adjusted earnings per diluted share range of $2.10 to $2.15, and now guides to the lower end of the adjusted earnings per share range.
• General and administrative expenses in the range of $90 million to $92 million, approximately 2.8 percent of system-wide sales, compared to a previous range of 2.9 to 3.0 percent of system-wide sales.
• Capital expenditures to be in the range of $15 million to $17 million from a previous range of $10 million to $15 million.
• Share repurchases of approximately $100 million in outstanding shares from a previous range of $80 million to $120 million.