News

Popeyes' parent company raises FY guidance

November 9, 2011

AFC Enterprises Inc., parent company of Popeyes restaurants, reported results for its fiscal third quarter ended Oct. 2.

Year over year highlights include:

• Net income was $5.8 million, or $0.24 per diluted share, compared to $5.9 million or $0.23 per diluted share in 2010.
• Global system-wide sales increased 5.5 percent compared to an 8.2 percent increase in 2010.
• Global same-store sales increased 1.7 percent rolling over a 5.2 percent increase in 2010. Through the third quarter, global same-store sales were positive 2.2 percent compared to positive 1.6 percent last year.
• Domestic same-store sales increased 1.7 percent compared to a 5.3 percent increase last year.
• International same-store sales increased 1.8 percent compared to a 4.3 increase in 2010, representing the 7th consecutive quarter of same-store sales growth.
• Through the end of Q3, operating EBITDA was $34.5 million, at 29.4 percent of total revenue, compared to $35.9 million, at 32.0 percent of total revenue last year. The 260 basis point decrease in operating EBITDA was primarily due to investments in general and administrative expenses and higher commodity costs in company-operated restaurants partially offset by higher revenues.

Also during the quarter, the Popeyes system opened 26 new restaurants and permanently closed 25 restaurants in the third quarter. Through the third quarter, the company had opened 88 new restaurants and permanently closed 64, resulting in 24 net unit openings compared to 11 net openings last year.

Strategic plan update

AFC Enterprises CEO Cheryl Bachelder provided an update on Popeyes' strategic plan, which focuses on "building the brand; running great restaurants; strengthening unit economics; and ramping up new unit growth."

"In the third quarter, these organizing principles led to growth in market share, positive same-store sales and strong new unit openings in a very competitive marketplace. We are pleased with these results," she said.

The company's marketing calendar drove solid same-store sales, behind the launch of the Rip'n Chick'n item and the Bonafide bone-in chicken. Additionally, at the end of Q3, Popeyes rolled out the Dip'n Chick'n. The chain is currently promoting its 3rd annual Crawfish Festival.

From an operational perspective, Popeyes' Q3 Guest Experience Monitor (GEM) scores were approximately 76 percent, up 3 percentage points from a year ago. Speed of Service scores were up 4 percentage points from Q3 2010.

The GEM metric is now in use in 48 percent of the company's international restaurants.

The company continues to focus on international development. Through the third quarter, Popeyes completed its planned exit from Indonesia, closing a total of 15 restaurants, as part of its strategy to strengthen the performance of its international segment.

Fiscal 2011 Guidance

The company expects global same-store sales for fiscal 2011 to be positive 2.0 percent to 2.5 percent. This represents an increase from the company's previous guidance of positive 1.0 percent to 2.0 percent.

Popeyes also expects its global new openings will be in the range of 130-140 restaurants, compared to 120-140 restaurants in previous guidance. Many of the fourth quarter units are scheduled to open in late December.

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