Operations

Q2 Del Taco income spikes 148.5% over last year's quarter

Photo: File/provided.

July 23, 2021

As Del Taco announced the opening of a store in Roseville, in Northern California, this week the brand also shared results of its second-quarter earnings, indicating systemwide comp sales grew 17.8% compared with the prior year's second quarter, according to a news release. In fact, leadership relayed that Del Taco's quarterly income from operations grew a healthy 148.5% compared to the same period last year.

The information applies to the company's operations over the 12-week period that ended June 15. Some of the other highlights of the period, include:

• Company-operated comparable restaurant sales increased 18.3%.
• Franchise comparable restaurant sales increased 17.2%;
• Total revenue grew 19.5% over Q2 2020 to $125 million.
• Quarterly adjusted net income rose to $6.1 million, or 16 cents per diluted share, compared to an adjusted net loss of $75,000 in Q2 2020.
• Restaurant contribution margin grew to 18.9% this quarter-year, compared to 16.4% in Q2 2020.
• Adjusted EBITDA was $16.9 million compared to $12.1 million the previous year's quarter.
• Two franchised restaurant openings.
• Quarterly cash dividend of 4 cents per share, payable on Aug. 25 to shareholders of record on Aug. 11.

"We generated outstanding revenue and profitability growth during the second quarter as we leveraged our top-line momentum across all key cost inputs," John D. Cappasola, Jr., Del Taco president and CEO, said in the release. "Top-line growth was characterized by system-wide comparable restaurant sales growth versus 2020 in the high teens, representing mid-single digit growth versus 2019. Importantly, compared to 2019 all day-parts were positive during the second quarter except for breakfast, which has since improved to flat in the third quarter, while late snack and graveyard were our top performing dayparts compared to 2019, aided by a strong delivery mix that again reached approximately 7% of sales.

"Looking ahead, our focus on driving sales includes plans to introduce innovative new products and platforms along with the launch of our new Del App and loyalty program this September. In fact, just today we introduced a new breakfast platform centered on Double Cheese Breakfast Tacos that is aimed at capitalizing on the continued normalization of morning routines and strong breakfast seasonality as we head into fall. Later this summer, we will follow this up with yet another exciting platform launch, Stuffed Quesadilla Tacos, which puts us in a great position to generate guest excitement and momentum in the back half of 2021 and entering 2022."

The company recently signed a new franchise development agreement for 12 restaurants across the Florida panhandle, the third development agreement Del Taco has signed in 2021 for a total of 30 restaurants, all in the Southeast.

Based on the current development backlog, the three newly signed development agreements and additional agreements the company expects to announce shortly, Del Taco expects system-wide openings will continue to be led by franchisees and will increase modestly in 2022, compared to the 13 expected system-wide openings in 2021, followed by system-wide new unit growth of 5% beginning in 2023.

The Roseville store that opened this week on Blue Oaks Boulevard marks the brand's tenth Sacramento-area location. The company is also based in California and has approximately 600 restaurants across 16 states.