Financial Overview — October 2008
Wingstop Soars with 21 Consecutive Quarters of Comp Store Sales Increases. The successive increase for the third quarter of 2008 was 6.4 percent, and the first three quarters combined is up 7.4 percent over the same period last year.
Wingstop President and CEO James A. Flynn announced today that for the 21st consecutive quarter comp store sales have increased.
The successive increase for the third quarter of 2008 was 6.4 percent, and the first three quarters combined is up 7.4 percent over the same period last year.
"These numbers speak to our convention theme this year, "Good to Great in '08'," said Flynn. "We feel really good about these numbers going into our busiest time of year, football and basketball seasons. And, compared to the rest of the market, these numbers are especially significant."
Flynn pointed to current industry news. Nation's Restaurant News recently reported new data on Sept. 18 by the International Foodservice Manufacturers Association and Technomic Inc., that only nine percent of 663 restaurant operators surveyed in August indicated they held an optimistic outlook for the foodservice industry over the next 12 months.
"Given the current economic firestorm, we are grateful for our loyal patrons. We plan to just keep our heads down performing the basics of running excellent locations," said Flynn.
Flynn will be honored this month with a Golden Chain award at this year's MUFSO conference.
OKLAHOMA CITY — SONIC CORP. said late Tuesday that systemwide same-store sales for the 3,400-unit drive-thru chain were “slightly negative” for its fourth quarter ended Aug. 31, as franchised restaurants posted gains but corporate or joint-venture Sonic branches had “significantly negative” results. Same-store sales at the corporate units, about 20 percent of the chain, fell 5 percent to 7 percent, analysts estimated. Corporate same-store sales fells 3.9 percent in the third quarter. Full-year systemwide same-store sales were positive, said Sonic, which plans to release complete quarterly results Oct. 16.- NASHVILLE, Tenn. — Franchisor SAGITTARIUS BRANDS INC., owner of the Captain D’s Seafood and Del Taco brands, has completed the sale of 15 Del Taco properties for $24 million in a leaseback deal with INNOVATIVE PROPERTY PARTNERS LLC. The proceeds were earmarked for debt reduction, Nashvillebased Sagittarius said Tuesday. The divested taco-burger branches, in Arizona, California and Nevada, were leased back to DEL TACO CORP., based in Lake Forest, Calif., which is operator or franchisor of some 500 restaurants. The Orange County, Calif.-based buyer’s brokerage firm, Faris Lee Investments, used its Faris Lee Capital arm to coordinate the financing, the companies said.
- NEW YORK — NEXCEN BRANDS INC., embattled franchisor of the Marble Slab Creamery, MaggieMoo’s, Pretzel Time Pretzelmaker and Great American Cookie chains, plus four retail and consumer product brands, said revenues from franchising were $12.0 million for the second quarter ended June 30, up from $4.7 million a year earlier. Despite recent credit trouble and corporate layoffs, NexCen’s chains added 721 branches in the past year to reach 1,895 locations by quarter’s end, the company said.
- ORLANDO, Fla. — DARDEN RESTAURANTS INC. on Tuesday reported a shortfall in its forecast first-quarter sales and earnings, citing weaker-than-anticipated economic and consumer dynamics. The operator of more than 1,700 casual-dining restaurants said net profit for the quarter ended Aug. 24 fell 22.5 percent from a year earlier as sales slowed at its Red Lobster and LongHorn Steakhouse chains. Total costs rose 26 percent, or nearly 4 percentage points when gauged as a percentage of total sales. For the quarter, Darden earned $82.1 million, or 58 cents per share, versus $105.9 million, or 72 cents per share, a year earlier. Costs from Darden’s acquisition of Rare Hospitality International Inc. last October totaled about 3 cents per share in the latest quarter. For the period, same-store sales rose 2.4 percent at Olive Garden, but fell at Darden’s other chains, including Capital Grille, Bahama Breeze and Seasons 52.
- LEBANON, Tenn. — The value of CBRL GROUP INC. shares jumped 12 percent Tuesday as the parent of the 577-unit CRACKER BARREL OLD COUNTRY STORE chain gave an upbeat forecast for the current year. CBRL’s fourth-quarter earnings per share, however, came in 1 cent short of Wall Street expectations. Net income for the period, ended Aug. 1, was $21.0 million, or 93 cents per share, versus a year-earlier profit of $27.8 million, or $1.13 a share. Income from continuing operations fell to $20.6 million, or 91 cents per share, from $28.2 million, or $1.15 per share, in the prior fourth quarter. Revenue declined 4.8 percent to $601.8 million as same-store restaurant sales fell 0.8 percent despite a 3.7-percent increase in the average check. For the full year, CBRL’s net profit was $65.6 million, or $2.80 per share, versus $162.1 million, or $5.23 a share, a year earlier. Annual income from continuing operations was $65.3 million, or $2.79 per share, versus $76.0 million, or $2.52 per share, in fiscal 2007. CBRL predicted same-store sales will grow 2 percent to 3
- EMERYVILLE, Calif. — JAMBA INC., parent of the Jamba Juice brand, said Friday it had inked a $25 million financing deal with VICTORY PARK CAPITAL ADVISORS LLC of Chicago. The agreement includes two-year, senior secured term notes and the issuance of 2 million shares of Jamba common stock to the investor. The stock comes with future options for either its repurchase or sale at a future time for $1.50 per share, pending various restrictions. Jamba has struggled with slumping sales and stock prices. In connection with the new agreement, Jamba’s previous credit pact with Wells Fargo Foothill LLC was terminated. Jamba and its franchisee operate 736 Jamba Juice units.
- BOSTON — UNO RESTAURANT HOLDINGS CORP. said discussions with bondholders over a potential refinancing have ended, but it has paid them a formerly withheld interest payment. Last month, Uno said it would defer the twice-yearly payment to negotiate a recapitalization that could help the company shore up its balance sheet and grow. The talks ended because mutually acceptable terms could not be reached, Uno said. However, “our operating results combined with our existing liquidity will enable us to meet our financial obligations and continue to invest in strategic initiatives,” CEO FRANK GUIDARA said. Uno and its franchisees operate 206 Uno Chicago Grills. Growth initiatives include a continued rollout of the Uno Express concept and the planned fall launch of the new Uno Due Go store concept.
- DENVER — Shares of CHIPOTLE MEXICAN GRILL INC. plummeted Friday as the company warned that its earnings would fall short in the third quarter on slow sales and escalating food costs. The operator of more than 775 burrito specialty fast-casual restaurants said it would likely raise menu prices in the fourth quarter. Chipotle said its earnings for the third quarter ending Sept. 30 would be “slightly below” the 62 cents a share it earned in the same period last year. Analysts on average had expected earnings of 72 cents a share, according to Thomson Financial. Same-store sales in the current quarter were in the low-single digits, Chipotle said. Full quarterly results are scheduled to be released in the third week of October. For all of fiscal 2008, Chipotle lowered its same-store sales outlook to growth in the low- to mid-single digits. Chipotle previously had forecast same-store sales growth in the mid-single digits. The company said it still expects to add 130 to 140 new stores by year-end. In trading Friday, Chipotle’s stock fell 20 percent to close at $56.70. Over the past 52 weeks, its shares have traded between $65.15 and $155.49.
- WINSTON-SALEM, N.C. — KRISPY KREME DOUGHNUTS INC. reported a narrower loss for the quarter ended Aug. 3, though revenue fell on slow sales and fewer units in operation. The operator or franchisor of 494 doughnut shops recorded a net loss of $1.9 million, or 3 cents per share, for its fiscal 2009 second quarter, versus a year-earlier net loss of $27.0 million, or 42 cents a share, including $22.1 million in impairment and lease termination charges, or 35 a cents a share. The latest quarter’s revenue fell 9.5 percent to $94.2 million, which Krispy Kreme said reflected a 13.5-percent drop in companystore sales and a 5.1-percent decline in supply chain revenue. However, franchising revenue jumped 30 percent. Systemwide same-store sales rose 3.9 percent for the quarter, reflecting only international gains, Krispy Kreme said. U.S. franchisees continue to struggle with rising commodity and energy costs, and as a result, the franchisees are expected to open fewer stores and close a “significant” number of outlets, the company said.
- DALLAS — DAVE & BUSTER’S INC. has swung to a profit for its second quarter from a year-before loss for that period, citing controlled costs and higher sales at its 50 casual-dining and entertainment venues. D&B also credited the federal economic stimulus rebates to taxpayers and stronger amusement revenue. The privately held company earned $970,000 for the quarter ended Aug. 3, versus a year-earlier net loss of $681,000. Dave & Buster’s reduced operating expenses to 94.8 percent of sales, versus 96.3 percent a year earlier. Interest expense also was cut, by 8.4 percent. Revenue rose 3.5 percent to $136.2 million as same-store sales increased 1.2 percent. Dave & Buster’s said increased revenue from games, to 47.3 percent of total sales, made up for a slight slowdown in food and beverage sales growth to 52.7 percent of sales, from 53.4 percent a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization, excluding start-up costs and other one-time charges, rose 9.8 percent to $20.7 million. Dave & Buster’s is owned by WELLSPRING CAPITAL MANAGEMENT LLC.
- ORLANDO, Fla. — PLANET HOLLYWOOD INTERNATIONAL INC. has completed the initial steps of its tender offer to acquire BUCA INC. for $9.7 million. The Planet Hollywood subsidiary Buca Financing LLC offered 45 cents for each Buca share. As of Tuesday, about 18.01 million shares, or about 84 percent of total Buca shares outstanding, had been validly tendered. On Wednesday, Buca Financing began another offer, which expires Friday, to acquire all remaining Buca shares. When finalized, Buca would stop trading on the Nasdaq exchange and be a wholly owned subsidiary of Planet Hollywood. Minneapolis-based Buca operates 88 Buca di Beppo dinner houses. Orlando-based Planet Hollywood owns the namesake resort and casino in Las Vegas, at least 18 namesake casual dining restaurants, and other retail and gaming operations.
- OAK BROOK, Ill. — MCDONALD’S CORP. on Tuesday reported an 8.5-percent jump in August global same-store sales, including a 4.5-percent increase in the United States, driven by beverages, breakfast items and Olympics-related advertising for the new Southern Style Chicken Sandwich. The world’s largest restaurant company, based here, has been one of few foodservice brands able to withstand the slumping economy and post positive sales trends as consumers dine out less because of high gas prices, the housing market slump and unemployment concerns. In August, McDonald’s restaurants in Europe recorded a same-store sales increase of 11.6 percent. Locations in the Asia-Pacific/Middle East/Africa region posted a same-store sales gain of 10 percent. The 31,000-branch global chain’s results in the United States, where McDonald’s is operator or franchisor of more than 14,000 restaurants, were described by foodservice securities analyst DAVID PALMER of UBS EQUITY RESEARCH as “nearly double the U.S. fast-food industry.” Palmer said his research indicates that U.S. same-store sales for the overall quick-service segment slowed in August to about a 2-percent gain, from an increase of between 3 percent and 4 percent in July. Many restaurant companies no longer disclose monthly same-store sales results, switching instead to quarterly reporting schedules, so analysts’ estimates have become necessary for monthly comparison purposes.
- WOODLAND HILLS, Calif. — GRILL CONCEPTS INC. completed a $5 million private placement of its stock, and has earmarked the proceeds for working capital needs and expansion of the company’s full-service DAILY GRILL, upscale THE GRILL ON THE ALLEY and new IN SHORT ORDER fast-casual concepts, the company said. The sale of convertible preferred stock and warrants was made to CHARLES MATHEWSON, as trustee of the CHARLES N. MATHEWSON TRUST, who was described by Grill Concepts officials as “a longtime friend and investor.” In the private offering, Grill Concepts sold 5,000 shares of convertible preferred stock, with each share convertible into 250 shares of common stock, or 1.25 million shares in total. The conversion price was $4 per share. The transaction also included warrants to purchase up to 600,000 additional common shares, also at $4 per share. There are about 8.8 million Grill Concepts shares outstanding, and the company’s per-share stock price has fluctuated between $2.02 and $7 during the past 52 weeks. In trading Monday, Grill Concepts’ stock fell 7.34 percent to close at $2.02 a share. The company operates 31 restaurants, including five The Grill on the Alley locations, 25 casual-dining Daily Grill restaurants, and one unit of In Short Order.