News
Popeyes sees Q1 comps improve, net income fall
May 27, 2009
ATLANTA — AFC Enterprises Inc., the franchisor and operator of Popeyes, has reported an increase in systemwide sales of 1.1 percent, compared to an increase of 1.5 percent last year, for the first quarter of 2009 ended April 19.
Global same-store sales were up 0.2 percent, compared to a decrease of 1.3 percent last year. Domestic same-store sales were down 0.3 percent compared to a decline of 1.8 percent last year. International same-store sales increased 4.8 percent compared to an increase of 3.5 percent last year.
Total revenues were down 10 percent at $47.9 million, compared to $53.3 million in the same period last year. The decrease in revenues was principally due to the company's successful re-franchising of 14 company-operated restaurants in the Atlanta and Nashville markets. After adjusting for franchise revenue, general and administrative savings, and lower depreciation and amortization, the first quarter impact of re-franchising those company-operated restaurants was favorable to operating profit by approximately $0.5 million.
Net income was above expectations at $5 million, down 22 percent compared to $6.4 million in the same quarter last year.
"Our first quarter performance was good. Global same-store sales for the quarter were positive for the first time since the second quarter of 2006, and according to independent data, our quarterly domestic same-store sales significantly outpaced the chicken QSR category," said AFC Enterprises CEO Cheryl Bachelder. "This trend improvement is the result of promoting our famous and favorite bone-in chicken and seafood with more compelling price points and an advertising campaign that is resonating with our core consumers."
Fiscal 2009 guidance
Given the favorable guest response to Popeyes new value offerings, the company is projecting global same-store sales for fiscal 2009 to be in the range of negative 1.0 percent to positive 1.0 percent, an increase from our previous guidance of negative 1.0 percent to negative 3.0 percent.
In the current consumer and credit market environment, and consistent with previous guidance, the company expects its global new openings to be in the range of 90-110 restaurants and its closures to be in the range of 140-160 restaurants, resulting in 30-70 net restaurant closings. Popeyes restaurant closures typically have sales significantly lower than the system average.
The company expects fiscal 2009 general and administrative expenses to be consistent with its previous guidance of 3.1 percent to 3.2 percent of systemwide sales, among the lowest in the restaurant industry. The company will continue to tightly manage its general and administrative expenses and invest in key strategic initiatives, including its continued commitment to national cable advertising and operations improvements which management believes are essential for the long-term growth of the brand.
Based on the projected improvements in same-store sales, the company now expects its 2009 earnings per share projection to be at the upper end of the guidance range of $0.62-$0.67 per diluted share.
Conference call
A replay of the company conference call with the investment community will be available for 90 days via webcast at the company's Web site, under "Investor Information" and "AFC Enterprises First Quarter 2009 Earnings Conference Call" or through a dial-in number for a limited time following the call.
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