Financial Overview — July 2010
Domino's gets soccer, Britain's Got Talent boost
LONDON, July 12 - Domino's Pizza reported a 29 percent increase in first half pretax profit as sales were boosted by the soccer World Cup and the company's sponsorship of TV phenomenon 'Britain's Got Talent. Domino's, which operates the British and Irish franchises of the global delivery brand, made a pretax profit of 17.5 million pounds in the half year to June 27 while sales increased by 21 percent to 237.1 million. "The company experienced very strong growth over the period driven by a combination of tactical promotions, the third year of our Britain's Got Talent sponsorship, the start of the football World Cup and the continued growth in sales through our e-commerce platform," it said in a statement on Monday.- DEERFIELD, Ill. – COSI INC., based here, Friday reported its first positive same-store sales since 2008, as it shared partial results for its second quarter ended June 28. Full results will be released Aug. 12. Cosi said that systemwide sales rose 3.1 percent on a year-over-year basis for its chain of 86 franchisor-run fast-casual restaurants and 58 franchised locations. Second-quarter revenue fell 6.4 percent to $29.6 million, compared with the year-earlier period, Cosi said. During the quarter, Cosi sold 13 corporate units in the Washington, D.C., area to CAPITAL C RESTAURANTS.
- RICHARDSON,Texas — WINGSTOP reported Thursday a 1.5-percent same-store sales increase for the first half of 2010, continuing what it said was 28 consecutive quarters of positive sales trends. Wingstop, which operates and franchises 447 casual-dining restaurants, said the positive sales results marked seven straight years of continued growth for the 16-year-old chicken-wing chain. The company said it plans to continue its aggressive expansion plan with 50 franchised units scheduled to open this year in New York, Chicago, Kansas City and Mexico.
- COLUMBUS, Ohio – BRAVO BRIO RESTAURANT GROUP INC., based here, filed with securities regulators late last week to raise up to $172.5 million in an initial public offering that would be used to repay debt. Bravo Brio operates 83 full-service Italian restaurants in 27 states under the Bravo! Cucina Italiana and Brio Tuscan Grille brands. The company has been owned since 2006 by Bravo Development Holdings LLC, whose major shareholders are private equity firms BRUCKMANN, ROSSER, SHERRILL & CO. MANAGEMENT LP and CASTLE HARLAN INC. The company said its revenue grew by about 57 percent between 2005 and 2009 and last year reported a profit of $3.4 million on revenue of $311.7 million, compared to a 2008 net loss of $61.4 million on revenue of $300.8 million.
- DALLAS — BRINKER INTERNATIONAL INC. said Thursday it completed the $180 million sale of its 162-unit ON THE BORDER MEXICAN GRILL & CANTINA to GOLDEN GATE CAPITAL, a private equity firm based in San Francisco. Brinker said proceeds from the sale will be used to repurchase company shares, which DOUG BROOKS, president and chief executive of Brinker, said “emphasizes Brinker’s commitment to return value to shareholders.” Brinker expects to generate fees for a year from “transitional support services” to its former Mexican casual-dining division. Brinker owns and franchises more than 1,500 restaurants under the CHILI’S GRILL & BAR and MAGGIANO’S LITTLE ITALY brands. The company also retains a minority interest in ROMANO’S MACARONI GRILL, the majority of which it sold to Golden Gate Capital in late 2008.
- SAN DIEGO — JACK IN THE BOX INC. said Tuesday it closed on a $600 million credit facility that will be used to pay down existing bank debt. The parent to the 2,200-unit Jack in the Box quick-service chain and the 500-unit fast-casual QDOBA MEXICAN GRILL concept, said the new, five-year facility is comprised of a $400 million revolving credit facility and a $200 million term loan. Proceeds from the refinancing will be used to retire a $150 million revolver, which was due in December 2011, as well as a $370 million term loan due in December 2012. About half of the $400 million revolving credit facility will be drawn and $200 million will be outstanding on the term loan, Jack in the Box said. Both will mature in June 2015. The company said it is expected to book about $2.3 million in deferred financing fees in the third quarter as a result of the refinancing.
CARPINTERIA, Calif. — CKE RESTAURANTS INC. swung to a loss in its first quarter from a year-ago profit, as sales slid at the CARL’S JR. and HARDEE’S quick-service chains, operating and labor costs rose, and $20.9 million in costs surrounding its proposed acquisition were booked. A week before the company’s shareholders are scheduled to vote on a pending buyout offer from APOLLO MANAGEMENT, CKE Restaurants reported a net loss of $3.1 million, or 6 cents per share, for the first quarter ended May 17. In the same quarter a year earlier, CKE earned a profit of $14.4 million, or 26 cents per share. First-quarter revenue fell 2.6 percent to $435.2 million. First-quarter blended same-store sales for corporate units fell 3.9 percent. Same-store sales at corporate Carl’s Jr. locations fell 6.1 percent, and fell 1.2 percent at company-owned Hardee’s.- ORLANDO — DARDEN RESTAURANTS INC., the nation’s largest casual-dining operator, reported Wednesday a 6-percent, year-to-year drop in its fourth-quarter profit amid what it said was month-to-month sales volatility and cautious consumer sentiment. Darden, which operates 1,824 restaurants under brands including RED LOBSTER and OLIVE GARDEN, reported net income of $115.6 million, or 80 cents per share, for the fourth quarter ended May 30. In the same quarter a year earlier,Darden earned $123 million, or 87 cents per share. Darden took a pre-tax, non-cash correction of $12.7 million in the fourth quarter associated with its third-quarter estimate of gift-card redemptions, which reduced net earnings by about 5 cents a share.Total sales in the latest quarter fell 5.7 percent to $1.86 billion. Blended same-store sales for Olive Garden, Red Lobster and LONGHORN STEAKHOUSE fell 2.3 percent. For the full year, net earnings totaled $404.5 million, or $2.84 per share, compared with $372.2 million, or $2.65 per share, a year earlier. Fiscal 2009 included an extra fiscal week that added about 6 cents a share. For the year, sales totaled $7.11 billion, down about 1.4 percent from the year before.
- DALLAS — BRINKER INTERNATIONAL INC. said Wednesday it entered into a $400 million unsecured, senior credit facility consisting of a $200 million revolver and a $200 million term loan. The company, which operates or franchises about 1,700 restaurants under the CHILI’S GRILL & BAR and MAGGIANO’S LITTLE ITALY brands, said the funds will be used to drive its “Plan to Win,” which includes a $100 million kitchen reengineering program and restaurant refurbishment.
- LOS ANGELES — Blaming the still-volatile economy and comparisons with a popular promotion last year, CALIFORNIA PIZZA KITCHEN INC. on Monday significantly lowered its sales and profit outlook for the second quarter. For the quarter ended July 4, CPK said it now expects earnings of 10 cents to 15 cents per share, with same-store sales projected to fall 6 percent to 7 percent. The company earlier had forecasted second-quarter earnings between 24 cents to 26 cents per share and a same-store sales decline of 0.5 percent to 2.5 percent. In last year’s second quarter, CPK earned 25 cents a share and recorded a 6.5-percent decline in samestore sales. CPK said same-store sales were down 2.7 percent in April and down 7.9 percent in May. The results were blamed in part on comparisons with last spring, when the company promoted its Thank You Card Program, offering guests the opportunity to win prizes on return visits. CPK did not offer the Thank You Card program in this year’s second quarter, but said it would resurrect it in the third quarter.
- OKLAHOMA CITY, Okla. — Unemployment continues to drag on sales at SONIC CORP.’s restaurants, the company said Wednesday, leading it to lower its fiscal 2010 earnings outlook. Sonic, which is scheduled to release its third-quarter results on June 21, said Wednesday that it expects same-store sales for the three months ended May 31 to fall between 6 percent and 6.5 percent.The operator or franchisor of 3,500 drivein restaurants said it anticipates same-store sales to fall 4 percent to 8 percent in the fourth quarter. The company reduced its earnings forecast for fiscal 2010 to between 50 cents to 55 cents a share, down from an earlier expectation of 55 cents to 60 cents a share. Sonic earned 81 cents a share in fiscal 2009. Sonic said it has put in place a menu and marketing strategies to stem the sales declines, including a new ice cream formula and emphasizing premium sandwiches by offering a free medium order of tater tots with purchases. CLIFFORD HUDSON, chairman and chief executive of Oklahoma Citybased Sonic, said that strategy helped keep the check average steady in the third quarter. Hudson also said Sonic would introduce a quarter-pound foot-long chili-cheese hot dog at a special price in July.
- HOUSTON — LUBY’S INC. said it swung to a profit in the third quarter from a year-ago loss because of improving sales, more catering business and lower costs. The parent to 96 cafeteria restaurants reported net income of $730,000, or 3 cents per share, for the May 5-ended quarter. In last year’s third quarter, Luby’s posted a net loss of $1.1 million, or 4 cents per share. Revenue for the latest quarter declined 5.3 percent to $57.2 million, which reflected lower restaurant sales but a boost from its Culinary Contract Services division. Same-store sales at Luby’s fell 4.8 percent in the quarter, compared with a 6.3-percent decline in same-store sales a a year ago. The company noted that sales also had improved sequentially from the second quarter’s same-store sales drop of 12.5 percent. Luby’s credited improving consumer confidence and positive response to limited-time offers for the chain’s increased guest traffic for the quarter. However, traffic gains were offset by decreased spending as a result of lower menu prices and deals.