Domino's Pizza, Inc. (NYSE: DPZ) today announced results for the fourth quarter and fiscal 2016, comprised of strong growth in same store sales, global store counts and earnings per share. Domestic same store sales grew 12.2% during the quarter versus the year-ago period, and 10.5% for the full year, continuing the positive sales momentum in the Company's domestic business. The international division also posted strong results, with same store sales growth of 4.3% during the quarter and 6.3% for the full year. The fourth quarter marked the 92nd consecutive quarter – or 23rd year – of positive international same store sales growth and the 23rd consecutive quarter of positive domestic same store sales growth. The Company also had record global net store growth of 1,281 stores in 2016, comprised of 171 net new domestic stores and 1,110 net new stores internationally.
Fourth quarter diluted EPS was $1.48, up 25.4% over the prior-year quarter; full year diluted EPS was $4.30, up 23.9% over the prior year. Management noted that the as-reported diluted EPS for both the fourth quarter and fiscal 2015 was negatively impacted by expenses related to the Company's recapitalization, and was positively impacted by the inclusion of an extra, or 53rd, week in the fourth quarter of 2015. Fourth quarter diluted EPS was up 28.7% over the prior-year quarter as-adjusted EPS of $1.15; full year diluted EPS was up 24.6% over the prior year as-adjusted EPS of $3.45.
On February 15, 2017, the Board of Directors declared a 46-cent per share quarterly dividend for shareholders of record as of March 15, 2017 to be paid on March 30, 2017. This represents a 21.1% increase over the previous quarterly dividend amount.
"I'm extremely proud of our franchisees and operators worldwide, including those who contributed toward back-to-back years of double digit sales growth in the U.S.," said J. Patrick Doyle, Domino's President and Chief Executive Officer. "While these unprecedented results speak for themselves, I am most pleased with the passion and energy we demonstrated throughout 2016 in meeting the challenge of sustained success. The momentum and alignment within our system has never been stronger."
Domino's Pizza Announces 2016 Financial Results
Record Global Store Growth, Second Straight Year of Double-Digit U.S. Comps and Strong EPS Highlight 2016 Results
DineEquity, Inc. Reports Fourth Quarter and Fiscal 2016 Results
Fourth Quarter Domestic system-wide comparable same-restaurant sales were negative 2.1% for IHOP and negative 7.2% for Applebee's
DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar® and IHOP® restaurants, today announced financial results for the fourth quarter and fiscal 2016.
"While this has been a challenging period for the industry, particularly for casual dining and Applebee's, I have confidence in our brands, our franchisees and our team members," said Richard J. Dahl, Chairman and interim Chief Executive Officer of DineEquity, Inc.
Mr. Dahl added, "Working with a world-class management consulting firm to conduct a comprehensive diagnostic on Applebee's, we are moving forward with a plan to significantly invest in the growth of our brands for the long-term benefit of our franchisees and shareholders. We have identified key strategic initiatives, which we believe will drive meaningful improvements in sales and traffic over time. To drive the business forward, we know that there is more that needs to be done. I am confident in our roadmap."
Fourth Quarter of Fiscal 2016 Financial Highlights
- GAAP net income available to common stockholders was $21.1 million for the fourth quarter of 2016, or earnings per diluted share of $1.18. This compares to net income available to common stockholders of $25.0 million, or earnings per diluted share of $1.35, for the fourth quarter of 2015. GAAP net income for the fourth quarter of 2016 declined compared to the same period of 2015 mainly due to a decrease in gross profit, partially offset by improvement in general and administrative expenses primarily due to lower incentive compensation.
- Adjusted net income available to common stockholders was $24.5 million, or adjusted earnings per diluted share of $1.37, for the fourth quarter of 2016. This compares to $29.5 million, or adjusted earnings per diluted share of $1.59, for the same period of 2015. The decrease in adjusted net income was mainly due to lower gross profit. The decrease was partially offset by improvement in general and administrative expenses primarily due to lower incentive compensation. (See "Non-GAAP Financial Measures" below.)
- General and administrative expenses were $37.0 million for the fourth quarter of 2016. This compares to approximately $45.0 million for the same period of 2015. The improvement was mainly due to lower incentive compensation and a decline in costs associated with the timing of franchise conferences.
Fiscal 2016 Financial Highlights
- GAAP net income available to common stockholders was $96.6 million for fiscal 2016, or earnings per diluted share of $5.33. This compares to net income available to common stockholders of $103.5 million, or earnings per diluted share of $5.52, for fiscal 2015. The decrease in GAAP net income was primarily due to lower gross profit, which included an incremental $9.4 million as a result of a 53rd week in fiscal 2015. The decrease was partially offset by lower income tax expense due to lower state tax rates applied to our deferred tax balances as the result of our restaurant support center consolidation as well as an improvement in general and administrative expenses mainly due to lower incentive compensation.
- Adjusted net income available to common stockholders was $108.9 million, or adjusted earnings per diluted share of $6.01, for fiscal 2016. This compares to $116.1 million, or adjusted earnings per diluted share of $6.19, for fiscal 2015. The decline in adjusted earnings per diluted share was mainly due to lower gross profit, which included an incremental $9.4 million as a result of a 53rd week in fiscal 2015. This was partially offset by fewer weighted average diluted shares outstanding, a decline in general and administrative expenses and a lower income tax rate. (See "Non-GAAP Financial Measures" below.)
- General and administrative expenses were $148.9 million for fiscal 2016. This compares to $155.4 million for fiscal 2015. The improvement was primarily due to lower incentive compensation.
- In fiscal 2016, cash flows from operating activities were $118.1 million compared to $135.5 million in fiscal 2015. Adjusted free cash flow was $122.5 million for full-year fiscal 2016, compared to $142.3 million for full-year fiscal 2015. (See "Non-GAAP Financial Measures" below.)
Same-Restaurant Sales Performance
Fourth Quarter of Fiscal 2016
- IHOP's domestic system-wide comparable same restaurant sales declined 2.1% for the fourth quarter of 2016.
- Applebee's domestic system-wide comparable same-restaurant sales declined 7.2% for the fourth quarter of 2016.
- IHOP's domestic system-wide comparable same restaurant sales decreased 0.1% for fiscal 2016.
- Applebee's domestic system-wide comparable same-restaurant sales decreased 5.0% for fiscal 2016.
Financial Performance Guidance for Fiscal 2017
The following projections for fiscal 2017 are based on management's expectations as of March 1, 2017.
- Applebee's domestic system-wide same-restaurant sales performance is expected to range between negative 4.0% and negative 8.0%.
- IHOP's domestic system-wide same-restaurant sales performance is expected to range between 0.0% and positive 3.0%.
- Applebee's franchisees are projected to develop between 20 and 30 new restaurants globally, the majority of which are expected to be international openings. As part of a detailed system-wide analysis to optimize the health of the franchisee system, we anticipate the closure of approximately 40 to 60 restaurants. The expected closures will be based on several criteria, including meeting our brand and image standards and operational results.
- IHOP franchisees and its area licensee are projected to develop between 75 and 90 restaurants globally, the majority of which are expected to be domestic openings. We expect the closure of approximately 18 restaurants as part of normal attrition.
- Franchise segment profit is expected to be between $323 million and $338 million.
- Rental and Financing segments are expected to generate roughly $38 million in combined profit.
- General and administrative expenses are expected to range between $170 million and $177 million, including non-cash stock-based compensation expense and depreciation of approximately $22 million. The anticipated increase in general and administrative expenses compared to fiscal 2016 is primarily due to expectations for higher personnel-related and incentive compensation costs as well as investments in Applebee's stabilization initiatives. These initiatives will total approximately $10 million in fiscal 2017 and we expect that a substantial amount will not recur. The range for expected general and administrative expenses is inclusive of approximately $9 million of non-recurring cash severance and equity compensation charges to be incurred in the first quarter of fiscal 2017.
- Interest expense is expected to be approximately $62 million. Approximately $3 million is projected to be non-cash interest expense.
- Weighted average diluted shares outstanding are expected to be approximately 18 million shares.
- The income tax rate is expected to be approximately 38%.
- Cash flow provided by operating activities is expected to range between $98 million and $108 million. The expected decline compared to fiscal 2016 is primarily due to projections for lower net income due to higher general and administrative expenses as well as expectations for domestic system-wide comparable same restaurant sales.
- Capital expenditures are projected to be roughly $12 million.
- Adjusted free cash flow (See "Non-GAAP Financial Measures" below) is projected to range between $96 million and $106 million. The expected decline in adjusted free cash flow compared to fiscal 2016 is primarily due to projections for lower net income due to higher general and administrative expenses as well as expectations for domestic system-wide comparable same restaurant sales.
2017 Adjusted Free Cash Flow (Non-GAAP) Guidance Table
Cash flows from operations
$98 – 108
Approximate net receipts from notes and equipment contracts receivable
Approximate capital expenditures
Adjusted free cash flow (Non-GAAP)
$96 - 106
About DineEquity, Inc.
Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and operates restaurants under the Applebee's Neighborhood Grill & Bar and IHOP brands. With more than 3,700 restaurants combined in 18 countries and 3 U.S. territories and approximately 400 franchisees, DineEquity is one of the largest full-service restaurant companies in the world.
Smoothie King Ends 2016 with 9.1 Percent Increase in Domestic Same-Store Sales and 100 Stores Opened, Looks to 2017 for Continued Success
From January 1, 2016 to January 1, 2017, Smoothie King boasted a 9.1 percent increase in same-store sales, building on the company's momentum of the past four years of record growth. The average annual sales per Smoothie King store has increased by 51% comparing 2016 to 2011. The innovative purveyors of "Smoothies With A Purpose®" also inked 111 franchise and development agreements—deals that will yield an additional 172 stores in the brand's growing 850-unit system.
"After achieving more than $350 million in system-wide sales last year, and with over 850 locations now open, Smoothie King's story is just beginning. We are well on our way to building an extraordinary purpose-driven brand that's an integral part in inspiring people to live healthy and active lifestyles," Kim said. "As we close out a successful year with impressive same-store sales, I feel strongly that this is still just the beginning for Smoothie King. We're poised to inspire more people than ever before to lead a more balanced lifestyle."
Fueling the brand's growth are six major area development agreements. During the first half of the year, new multi-unit area development agreements were signed for Chicago, Tucson, Dallas, Baltimore, Orlando and Virginia. Smoothie King also opened 39 new stores in 13 states across the Southeast, Northeast and Midwest. In total, the brand opened 100 new stores in 20 states throughout the year.
"The number of openings and signings the brand executed in top development markets during 2016 highlights Smoothie King's momentum as a record-breaking year for domestic openings. Our current franchisees are seeing the growth across the system, and they want to continue expanding with us. Interested candidates are eagerly joining the system to purchase open territories before they are sold out," said Tom O'Keefe, Smoothie King's President and Chief Operating Officer.
To aid in the brand's ongoing expansion efforts, Smoothie King brought on Kevin King as the new Chief Development Officer in May 2016. With a background working for well-known pizza franchises including Domino's Pizza and Papa Murphy's, King leads franchise development efforts as the brand works toward its goal of having 1,000 locations open by the end of 2017.
The demand for Smoothie King is not only evident in its ongoing development strides, but in its latest widespread consumer praise, too. In April, Smoothie King was voted the No. 1 brand in the Limited-Service Restaurant Beverage-Snack category in the 2016 edition of Nation's Restaurant News' Consumer Picks issue. To win the title, Smoothie King beat out brands like Krispy Kreme, Starbucks and Dunkin' Donuts. Most recently, Smoothie King was ranked No. 1 in the smoothie category in Entrepreneur's Franchise 500 Ranking for its 24th year.
Now, as the brand enters into 2017, it has its sights set on expansion in 16 key markets—Charlotte, North Carolina; Dallas, Texas; Miami, Florida; Orlando, Florida; Austin, Texas; Washington D.C.; Baltimore, Maryland; Columbus, Ohio; Indianapolis, Indiana; Cincinnati, Ohio; Jacksonville, Florida; Denver, Colorado; Phoenix, Arizona; San Antonio, Texas; New York; and Chicago, Illinois.
"What makes our brand so unique is a team that is focused on expansion. Reaching new markets and new guests is what we do every day to ensure we reach our vision: to be an integral part of every health and fitness plan," Kim said. "Last year put Smoothie King on track to reach 1,000 locations globally by the end of 2017, and with openings in Dubai and Trinidad and Tobago, there is no stopping our international reach and expansion opportunities."
Wingstop Inc. Reports Fiscal Fourth Quarter 2016 Financial Results
Announces Annual Guidance for Fiscal Year 2017
DALLAS, March 02, 2017 (GLOBE NEWSWIRE) -- Wingstop Inc. (NASDAQ:WING) today announced fiscal fourth quarter and fiscal year 2016 financial results for the period ended December 31, 2016 and annual guidance for fiscal year 2017.
Highlights for the Fiscal Fourth Quarter 2016 compared to the Fiscal Fourth Quarter 2015
Highlights for the Fiscal Year 2016 compared to the Fiscal Year 2015
* Adjusted EBITDA, adjusted net income and adjusted earnings per pro-forma diluted share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income and adjusted earnings per pro-forma diluted share to the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See “Non-GAAP Financial Measures.”
President and Chief Executive Officer Charlie Morrison stated, “2016 was an incredibly productive year at Wingstop as we executed on our key strategic and financial objectives and delivered exceptionally strong results for our shareholders. Our system-wide restaurant count grew 18.1% including 153 net new store openings, and we ended the year with 998 restaurants worldwide. We have now passed the 1,000 restaurant milestone, reflecting yet another step toward our goal of 2,500+ domestic restaurants and living out our mission to Serve the World Flavor.”
Morrison continued, “2016 marks our 13th consecutive year of positive same-store sales growth and another record number of unit openings, delivering 23.2% and 24.2% increases in adjusted EBITDA and adjusted net income, respectively.”
Morrison concluded, “We are excited about 2017. We recently launched national advertising, which is expected to provide us with more reach and frequency in existing media markets and first-time coverage for smaller and newer markets where we did not previously leverage TV and radio. We believe national advertising and growth in our online channels will position us well.”
Key Operating Metrics for the Fiscal Fourth Quarter 2016 Compared to the Fiscal Fourth Quarter 2015
Fiscal Fourth Quarter 2016 Financial Results
Total revenue for the fiscal fourth quarter 2016 increased 20.3% to $24.8 million from $20.6 million in the fiscal fourth quarter last year.
Cost of sales increased 23.4% to $7.0 million from $5.6 million in the prior fiscal year’s fourth quarter. As a percentage of company-owned restaurant sales, cost of sales increased 590 basis points to 76.1% from 70.2%. The increase was driven primarily by a 13.1% increase in commodities rates for bone-in chicken wings as compared to the prior year period, an increase in the average size of chicken wings, and an increase in labor as we make investments in roster sizes and staffing to support the continued top line growth in our company-owned restaurants, and increases related to pre-opening expenses and the ramp up of one company-owned restaurant that opened during the fourth fiscal quarter of 2016 as it achieves normal efficiency.
Selling, general & administrative expenses (SG&A) increased 13.4% to $8.7 million compared to $7.7 million in the prior fiscal year’s fourth quarter. The increase in SG&A expense is primarily due to headcount additions to support our continued growth, non-recurring professional fees of $0.1 million incurred in the current fiscal fourth quarter related to our secondary offering, and estimated incremental costs associated with the 53rd week of $0.6 million.
Net income increased to $4.3 million, or $0.15 per diluted share, compared to net income of $3.8 million, or $0.13 per diluted share in the prior fiscal year’s fourth quarter. The impact of the 53rd week on net income was $0.2 million.
Adjusted net income increased 15.5% to $4.4 million, or $0.15 per pro-forma diluted share, compared to $3.8 million, or $0.13 per pro-forma diluted share, in the prior fiscal year’s fourth quarter. A reconciliation between net income and adjusted net income, as well as diluted shares to pro-forma diluted shares is included in the accompanying financial data.
Key Operating Metrics for the Fiscal Year 2016 Compared to the Fiscal Year 2015
Fiscal Year 2016 Financial Results
Total revenue for fiscal year 2016 increased 17.2% to $91.4 million from $78.0 million in the prior fiscal year.
Cost of sales increased 13.9% to $25.3 million from $22.2 million in the prior fiscal year. As a percentage of company-owned restaurant sales, cost of sales increased 280 basis points to 73.8% from 71.0%. The increase was driven primarily by a 4.4% increase in commodities rates for bone-in chicken wings as compared to the prior fiscal year, an increase in the average size of chicken wings, an increase in labor as we make investments in roster sizes and staffing to support the continued top line growth in our company-owned restaurants, and increases related to pre-opening expenses and the ramp up of two company-owned restaurants that opened during 2016 as they achieve normal efficiency.
SG&A increased 1.5% to $33.8 million compared to $33.4 million in the prior fiscal year. The increase is primarily due to $1.1 million in expenses related to the franchisee convention, which occurs every 18 months and did not occur in 2015, expenses related to the 53rd week, and increases related to headcount additions and other recurring costs associated with being a public company incurred in the current fiscal year. SG&A expense in the prior fiscal year included a one-time fee of $3.3 million, paid in consideration for the termination of our management agreement with Roark Capital Management.
Net income increased to $15.4 million, or $0.53 per diluted share, compared to net income of $10.1 million, or $0.36 per diluted share in the prior fiscal year.
Adjusted net income increased 24.2% to $16.9 million, or $0.58 per pro-forma diluted share, compared to $13.6 million, or $0.47 per pro-forma diluted share, in the prior fiscal year. A reconciliation between net income and adjusted net income, as well as diluted shares to pro-forma diluted shares is included in the accompanying financial data.
As of December 31, 2016, there were 998 Wingstop restaurants system-wide. This included 922 restaurants in the United States, of which 901 were franchised restaurants and 21 were company-owned. Our international presence consisted of 76 franchised restaurants across five countries. During the fiscal fourth quarter 2016, there were 49 net system-wide Wingstop openings, including nine international franchised locations.
The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2016
CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Feb. 22, 2017-- The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the fourth quarter of fiscal 2016, which ended on January 3, 2017.
Total revenues were $603.1 million in the fourth quarter of fiscal 2016 as compared to $526.8 million in the fourth quarter of fiscal 2015. The fourth quarter of fiscal 2016 included 14 weeks compared to 13 weeks in the fourth quarter of fiscal 2015; the additional week in fiscal 2016 contributed approximately $54.7 million of sales. Net income and diluted net income per share were $32.4 million and $0.66, respectively, in the fourth quarter of fiscal 2016.
The Company recorded a pre-tax, non-cash charge of $0.1 million during the fourth quarter of fiscal 2016 related to the planned relocation of one The Cheesecake Factory restaurant. Excluding this item, net income and diluted net income per share were $32.4 million and $0.67, respectively.
Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.1% in the fourth quarter of fiscal 2016 (14 weeks vs. 14 weeks).
“We delivered our 28th consecutive quarter of positive comparable sales, marking seven years of strong financial performance and meaningful shareholder value creation,” said David Overton, Chairman and Chief Executive Officer. “We significantly outperformed the casual dining industry again during the fourth quarter as we continued to take market share.”
Overton concluded, “We delivered on all of our objectives in 2016, including producing solid comparable sales performance, achieving our domestic unit growth goal, expanding our international presence to a total of 15 locations and increasing operating margins, all of which contributed to approximately 20% earnings per share growth. By maintaining our differentiated positioning and commitment to operational excellence, we believe we will uphold our leadership position in the casual dining industry in 2017 and beyond.”
The Company opened five The Cheesecake Factory restaurants and one Grand Lux Cafeduring the fourth quarter of fiscal 2016, meeting its objective to open as many as eight Company-owned restaurants domestically in fiscal 2016.
Internationally, two The Cheesecake Factory restaurants opened in the fourth quarter of fiscal 2016, including the first location in Qatar and the third location in Mexico, for a total of four locations opened under licensing agreements during the year, as expected.
The Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share on the Company’s common stock. The dividend is payable on March 21, 2017 to shareholders of record at the close of business on March 8, 2017.
During the fourth quarter of fiscal 2016, the Company repurchased 0.5 million shares of its common stock at a cost of $27.5 million. The Company repurchased a total of 2.9 million shares of its common stock at a cost of $146.5 million during fiscal 2016.
The Company continues to expect that it will return its free cash flow to shareholders in fiscal 2017 in the form of dividends and share repurchases.
Conference Call and Webcast
The Company will hold a conference call to review its results for the fourth quarter of fiscal 2016 today at 2:00 p.m. Pacific Time. The conference call will be webcast live on the Company’s website at investors.thecheesecakefactory.com and a replay of the webcast will be available through March 24, 2017.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated created the upscale casual dining segment in 1978 with the introduction of its namesake concept. The Company, through its subsidiaries, owns and operates 208 full-service, casual dining restaurants throughout the U.S.A. and Puerto Rico, including 194 restaurants under The Cheesecake Factory® mark; 13 restaurants under the Grand Lux Cafe® mark; and one restaurant under the Rock Sugar Pan Asian Kitchen® mark (rebranding to RockSugar Southeast Asian Kitchen™). Internationally, 15 The Cheesecake Factory® restaurants operate under licensing agreements. The Company’s bakery division operates two bakery production facilities, in Calabasas Hills, CA and Rocky Mount, NC, that produce quality cheesecakes and other baked products for its restaurants, international licensees and third-party bakery customers. In 2016, the Company was named to the FORTUNE Magazine “100 Best Companies to Work For®” list for the third consecutive year. To learn more about the Company, visit www.thecheesecakefactory.com.
FORTUNE and 100 Best Companies to Work For® are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 3, 2016 ©2016 Time Inc.FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements, including uncertainties related to: the Company’s ability to deliver consistent and dependable comparable sales results over a sustained period of time; the Company’s ability to deliver increases in guest traffic; the strength of the Company’s brand; the Company’s ability to provide a differentiated experience to guests; the Company’s ability to outperform the casual dining industry and increase its market share; the Company’s ability to leverage sales increases and manage flow through; the Company’s ability to increase margins; the Company’s ability to grow earnings; the Company’s ability to remain relevant to consumers; the Company’s ability to increase shareholder value; the Company’s ability to expand its concepts domestically and work with its licensees to expand its concept internationally; the Company’s ability to support the growth of North Italia and Flower Child restaurants; the Company’s ability to develop a fast casual concept; the Company’s ability to utilize its capital effectively and continue to repurchase its shares; factors outside of the Company’s control that impact consumer confidence and spending; current and future macroeconomic conditions; acceptance and success of The Cheesecake Factory in international markets; changes in unemployment rates; the economic health of the Company’s landlords and other tenants in retail centers in which its restaurants are located; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to the Company; adverse weather conditions in regions in which the Company’s restaurants are located; factors that are under the control of government agencies, landlords and other third parties; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. Forward-looking statements speak only as of the dates on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC, which are available at www.sec.gov.
Jack in the Box Inc. Reports First Quarter FY 2017 Earnings; Updates Guidance for FY 2017; Declares Quarterly Cash Dividend
SAN DIEGO, February 22, 2017 – Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $37.0 million, or $1.14 per diluted share, for the first quarter ended January 22, 2017, compared with $33.9 million, or $0.94 per diluted share, for the first quarter of fiscal 2016.
Operating earnings per share, a non-GAAP measure which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, were $1.18 in the first quarter of fiscal 2017 compared with $0.93 in the prior year quarter.
A reconciliation of non-GAAP measurements to GAAP results is provided below, with additional information included in the attachment to this release. Figures may not add due to rounding. Sixteen Weeks Ended January 22, 2017 January 17, 2016 Diluted earnings per share from continuing operations – GAAP $ 1.14 $ 0.94 Restructuring charges 0.04 — Gains from refranchising — (0.01) Operating earnings per share – Non-GAAP $ 1.18 $ 0.93
During fiscal 2016, the company announced plans to reduce general and administrative costs. A comprehensive review of its organizational structure identified cost savings from workforce reductions, relocation and consolidation of the Qdoba corporate support center, refranchising initiatives, and information technology synergies across both brands. As a result, restructuring charges of $2.0 million, or approximately $0.04 per diluted share, were recorded during the first quarter of fiscal 2017. Charges Jack in the Box Inc. Page 2 -moreconsist primarily of facility closing costs and employee severance pay. These charges are included in “impairment and other charges, net” in the accompanying condensed consolidated statements of earnings.
Lenny Comma, chairman and chief executive officer, said, “Our first quarter results were mixed, with solid results at the Jack in the Box® brand offset by lower than expected sales and disappointing margins at Qdoba® . We are intent on improving the performance of the Qdoba brand with priorities focused on driving sales growth and managing labor and food costs more effectively.
"We were pleased that Jack in the Box system same-store sales outperformed sluggish industry trends during the quarter. And despite the weaker Qdoba results, our commitments to reduce G&A and to return cash to shareholders contributed to a 27 percent increase in operating earnings per share for the quarter.
"Consistent with restaurant and retail industry data, we've seen an abrupt downturn in February sales trends for both brands. We believe some of this slowdown may be attributable to delayed tax refunds, as well as record rainfall and flooding in California over the past few weeks which have impacted our Jack in the Box results.
"We've made good progress on our refranchising initiative, and as of today, have signed nonbinding letters of intent with franchisees to sell approximately 75 restaurants in several different markets." Increase/(decrease) in same-store sales: Sixteen Weeks Ended January 22, 2017 * January 17, 2016 Jack in the Box: Company 0.6% 0.5% Franchise 3.9% 1.8% System 3.1% 1.4% Qdoba: Company (1.4)% 1.5% Franchise (0.5)% 2.1% System (1.0)% 1.8% *Note: Due to the transition from a 53-week to a 52-week fiscal year, year-over-year fiscal period comparisons are offset by one week. The change in same-store sales presented in the 2017 column uses comparable calendar periods to balance the oneweek shift and to provide a clearer year-over-year comparison.
Jack in the Box system same-store sales increased 3.1 percent for the quarter and exceeded the QSR sandwich segment by 1.6 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 16-week time period ended January 22, 2017. Included in this Jack in the Box Inc. Page 3 -moresegment are 16 of the top QSR sandwich and burger chains in the country. Company same-store sales increased 0.6 percent in the first quarter, with average check up 4.9 percent.
Qdoba same-store sales decreased 1.0 percent system-wide and 1.4 percent for company restaurants in the first quarter. Company same-store sales reflected a 2.5 percent decrease in transactions, partially offset by growth in average check and catering sales.
Consolidated restaurant operating margin decreased by 90 basis points to 18.6 percent of sales in the first quarter of 2017, compared with 19.5 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box company restaurants increased 70 basis points to 21.6 percent of sales. The increase was due primarily to lower costs for food and packaging, partially offset by minimum wage increases in California that went into effect in January 2016 and January 2017. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of commodity deflation of approximately 5.6 percent in the quarter, favorable product mix changes and menu price increases. Restaurant operating margin for Qdoba company restaurants decreased 350 basis points to 13.1 percent of sales. The decrease was due primarily to the impact of new restaurant openings over the last 12 months, sales deleverage, labor staffing inefficiencies and wage inflation, and higher costs for food and packaging. The increase in food and packaging costs as a percentage of sales was impacted by increased promotional activity, partially offset by the benefits from commodity deflation of approximately 3.0 percent in the quarter.
Franchise margin as a percentage of total franchise revenues improved to 54.2 percent in the first quarter from 51.5 percent in the prior year quarter. The improvement was due primarily to higher royalty revenue and rental income from Jack in the Box franchised restaurants resulting from increases in franchise average unit volumes, and a decrease in franchise costs.
SG&A expense for the first quarter decreased by $10.2 million and was 11.4 percent of revenues as compared to 14.0 percent in the prior year quarter. Key items contributing to the decrease were the impact of the company's restructuring activities, including a $2.9 million decrease in pension and postretirement benefits, as well as a $1.7 million decrease in incentive compensation.
Interest expense, net, increased by $4.5 million in the first quarter due to increased leverage and a higher effective interest rate for 2017.
The tax rate for the first quarter of 2017 was 38.7 percent versus 37.6 percent for the first quarter of 2016. The higher tax rate in the first quarter of 2017 was due primarily to a decrease in work opportunity tax credits. Jack in the Box Inc. Page 4 -more
The company repurchased approximately 992,000 shares of its common stock in the first quarter of 2017 at an average price of $109.04 per share for an aggregate cost of $108.1 million. This leaves approximately $300 million remaining under stock buyback programs authorized by the company's Board of Directors.
The company also announced today that on February 21, 2017, its Board of Directors declared a quarterly cash dividend of $0.40 per share on the company’s common stock. The dividend is payable on March 20, 2017, to shareholders of record at the close of business on March 7, 2017.
The following guidance and underlying assumptions reflect the company’s current expectations for the second quarter ending April 16, 2017, and fiscal year ending October 1, 2017. Fiscal 2017 is a 52-week year, with 16 weeks in the first quarter, and 12 weeks in each of the second, third and fourth quarters. Fiscal 2016 was a 53-week year, with the additional week occurring in the fourth quarter. Second quarter fiscal year 2017 guidance
• Same-store sales of flat to down 2.0 percent at Jack in the Box system restaurants versus flat same-store sales in the year-ago quarter. • Same-store sales of down 1.0 to 3.0 percent at Qdoba company restaurants versus a 3.1 percent increase in the year-ago quarter. Fiscal year 2017 guidance
• Same-store sales increase of approximately 2.0 percent at Jack in the Box system restaurants.
• Same-store sales of approximately flat at Qdoba company restaurants.
• Commodity deflation of approximately flat to down 1.0 percent for both Jack in the Box and Qdoba.
• Consolidated restaurant operating margin of approximately 19.5 to 20.0 percent, depending on the timing of refranchising transactions and the margins associated with the restaurants sold.
• SG&A as a percentage of revenues of approximately 11.0 to 11.5 percent as compared to 12.7 percent in fiscal 2016.
• Impairment and other charges as a percentage of revenues of approximately 70 basis points, excluding restructuring charges. Jack in the Box Inc. Page 5 -more-
• Approximately 20 to 25 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations.
• Approximately 50 to 60 new Qdoba restaurants, of which approximately 30 are expected to be company locations.
• Capital expenditures of approximately $100 million.
• Tax rate of approximately 38.0 to 39.0 percent.
• Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, ranging from $4.25 to $4.45. This guidance assumes share repurchases of approximately $408 million during the year, representing the amount remaining under Board authorizations at the beginning of the fiscal year.
The Wendy's Company Reports Preliminary 2016 Results
16th consecutive quarter of positive same-restaurant sales; North America system same-restaurant sales increase 0.8% in 4Q and 1.6% in 2016 (+5.6% and +4.9% on a two-year basis, respectively)
The Wendy's Company (NASDAQ: WEN) today reported preliminary unaudited results for the fourth quarter and full year ended January 1, 2017. The Company plans to file its audited financial results on or before March 2, 2017.
"We have now recorded 16 consecutive quarters of positive same-restaurant sales and total new restaurant openings have accelerated in both North America and International with nearly 150 new restaurants opened globally in 2016," President and Chief Executive Officer Todd Penegor said. "As a result of our brand transformation efforts and with the support from our franchise partners, the Wendy's® system has never been stronger."
"As we look to 2017 and beyond, we are poised for strong global growth," Penegor said. "We believe we can grow the Wendy's system by approximately 1,000 restaurants and $2 billion in sales by 2020, resulting in a global system of about 7,500 restaurants generating $12 billion in sales. Importantly, this growth will be achieved in a profitable manner for both the Company and franchisees, which will help carry the momentum beyond 2020."
Preliminary fourth quarter and full year 2016 results
A summary of the Company's preliminary fourth quarter and full year 2016 results is provided below. The fourth quarter and full year 2015 results include the favorable impact of a 53rd operating week, which affects all comparisons to 2015. Due to the May 2015 sale of its bakery business, the Company has presented its bakery results as discontinued operations for all periods presented in its consolidated financial statements. See "Disclosure Regarding Non-GAAP Financial Measures" and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release (i.e., adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, adjusted tax rate and free cash flow). As used in this release, the terms adjusted EBITDA and adjusted earnings per share refer to adjusted EBITDA from continuing operations and adjusted earnings per share from continuing operations, respectively.
Preliminary fourth quarter summary
- Same-restaurant sales increased 0.8 percent at North America system restaurants in the fourth quarter of 2016, or 5.6 percent on a two-year basis.
- Revenues were $309.9 million in the fourth quarter of 2016, compared to $464.4 million in the fourth quarter of 2015. The 33.3 percent decrease resulted primarily from the ownership of 522 fewer Company-operated restaurants at the end of the 2016 fourth quarter compared to the beginning of the 2015 fourth quarter.
- Franchise royalty revenue and fees were $95.7 million in the fourth quarter of 2016, compared to $100.8 million in the fourth quarter of 2015. The 5.1 percent decrease primarily resulted from a decrease in franchise fees resulting from a year-over-year reduction in the number of restaurants sold through the Company's system optimization initiative.
- Franchise rental income was $40.7 million in the fourth quarter of 2016, compared to $26.4 million in the fourth quarter of 2015. The 54.2 percent increase resulted primarily from the Company's system optimization initiative.
- Company-operated restaurant margin was 18.8 percent in the fourth quarter of 2016, compared to 19.2 percent in the fourth quarter of 2015. The 40 basis-point decrease was primarily the result of higher other operating costs and increased labor rates, partly offset by lower commodity costs and the favorable impact from the Company's Image Activation program.
- General and administrative expense was $61.2 million in the fourth quarter of 2016, compared to $72.4 million in the fourth quarter of 2015. The 15.5 percent decrease resulted primarily from cost savings related to the Company's system optimization initiative, as well as lower incentive compensation.
- Operating profit was $79.2 million in the fourth quarter of 2016, compared to $116.3 million in the fourth quarter of 2015. The 31.9 percent decrease resulted primarily from a year-over-year decrease in System optimization gains, net, partly offset by a year-over-year decrease in Impairment of long-lived assets, in addition to the items discussed above.
- Interest expense was $29.3 million in the fourth quarter of 2016, compared to $28.2 million in the fourth quarter of 2015.
- Income from continuing operations was $28.9 million in the fourth quarter of 2016, compared to $88.7 million in the fourth quarter of 2015. The decrease resulted from the year-over-year decrease in Investment income, net and System Optimization gains, net, partly offset by a year-over-year decrease in income taxes.
- Net income was $28.9 million in the fourth quarter of 2016, compared to $85.9 million in the fourth quarter of 2015.
- Adjusted EBITDA from continuing operations was $91.1 million in the fourth quarter of 2016, compared to $107.6 million in the fourth quarter of 2015. The 15.3 percent decrease resulted primarily from the ownership of 522 fewer Company-operated restaurants at the end of the 2016 fourth quarter compared to the beginning of the 2015 fourth quarter.
- Adjusted EBITDA margin (adjusted EBITDA divided by total revenues) was 29.4 percent in the fourth quarter of 2016, compared to 23.2 percent in the fourth quarter of 2015. The 620 basis-point improvement reflects the positive impact of the Company's system optimization initiative.
- Reported diluted earnings per share from continuing operations were $0.11 in the fourth quarter of 2016, compared to $0.32 in the fourth quarter of 2015.
- Reported diluted earnings per share were $0.11 in the fourth quarter of 2016, compared to $0.31 in the fourth quarter of 2015.
- Adjusted earnings per share from continuing operations were $0.08 in the fourth quarter of 2016, compared to $0.12 in the fourth quarter of 2015.
Preliminary full year 2016 summary
- Same-restaurant sales increased 1.6 percent at North America system restaurants in 2016, or 4.9 percent on a two-year basis.
- Revenues were $1,435.4 million in 2016, compared to $1,870.3 million in 2015. The 23.3 percent decrease resulted primarily from the ownership of 627 fewer Company-operated restaurants at the end of the 2016 compared to the beginning of 2015.
- Franchise royalty revenue and fees were $371.5 million in 2016, compared to $344.5 million in 2015. The 7.8 percent increase primarily resulted from the Company's system optimization initiative, in addition to higher same restaurant sales at franchised restaurants.
- Franchise rental income was $143.1 million in 2016, compared to $87.0 million in 2015. The 64.5 percent increase resulted primarily from the Company's system optimization initiative.
- Company-operated restaurant margin was 19.1 percent in 2016, compared to 17.7 percent in 2015. The 140 basis-point increase was primarily the result of lower commodity costs and the favorable impact from the Company's Image Activation program, partly offset by higher other operating costs and increased labor rates.
- General and administrative expense was $245.9 million in 2016, compared to $256.6 million in 2015. The 4.2 percent decrease resulted primarily from cost savings related to the Company's system optimization initiative, as well as lower incentive compensation, partly offset by higher professional fees and legal fees related to the unusual payment card activity.
- Operating profit was $314.8 million in 2016, compared to $274.5 million in 2015. The 14.7 percent increase resulted primarily from a year-over-year decrease in Depreciation and amortization expense, General and administrative expense and Reorganization and realignment costs.
- Interest expense was $114.8 million in 2016, compared to $86.1 million in 2015. The 33.3 percent increase resulted primarily from higher total debt levels related to the Company's debt restructuring completed in the second quarter of 2015.
- Income from continuing operations was $129.6 million in 2016, compared to $140.0 million in 2015. The 7.4 percent decrease resulted from the year-over-year decrease in Investment income, net, partly offset by a year-over-year decrease in Depreciation and amortization expense, General and administrative expense, Reorganization and realignment costs and income taxes.
- Net income was $129.6 million in 2016, compared to $161.1 million in 2015.
- Adjusted EBITDA from continuing operations was $391.9 million in 2016, compared to $392.4 million in 2015, despite the ownership of 627 fewer Company-operated restaurants at the end of the 2016 compared to the beginning of 2015.
- Adjusted EBITDA margin (adjusted EBITDA divided by total revenues) was 27.3 percent in 2016, compared to 21.0 percent in 2015. The 630 basis-point improvement reflects the positive impact of the Company's system optimization initiative.
- Reported diluted earnings per share from continuing operations were $0.49 in 2016, compared to $0.43 in 2015. The increase reflects an 18.9 percent year-over-year reduction in the weighted average diluted shares outstanding.
- Reported diluted earnings per share were $0.49 in 2016, compared to $0.49 in 2015.
- Adjusted earnings per share from continuing operations were $0.40 in 2016, compared to $0.33 in 2015.
"We are very proud that we were able to hold adjusted EBITDA flat year-over year despite selling a significant number of Company-operated restaurants during 2016," Chief Financial Officer Gunther Plosch said. "We look forward to realizing the positive benefits of our brand transformation in 2017 and beyond, with higher franchise revenues driving a higher quality of earnings."
Third phase of system optimization now complete The Company has completed its plan to reduce its Company-operated restaurant ownership to approximately 5 percent of the total system. The Company sold a total of 310 restaurants to franchisees during 2016, which is in addition to the 227 restaurants that were sold in the second half of 2015. In total, the third phase of system optimization generated pretax proceeds and fees of $435 million.
"Our system is stronger following the completion of the third phase of our system optimization initiative," Penegor said. "All markets were awarded to strong operators who have demonstrated a commitment to restaurant reimaging and opening new restaurants which will be imperative to our future growth."
"Going forward, we will continue to strategically buy and sell restaurants in order to further strengthen our franchisee base, drive new restaurant development and accelerate Image Activation," Penegor said. "By also facilitating franchisee-to-franchisee restaurant transfers ("Buy and Flips") we ensure that we are putting restaurants in the hands of well capitalized franchisees that are committed to long-term growth. During 2016 we facilitated 144 Buy and Flips and expect to complete around 400 in 2017, which includes approximately 50 Buy and Flips that were originally scheduled to close in late 2016."
Global Image Activation and new restaurant openings momentum continues The Company and its franchisees reimaged 521 North America system restaurants and built 99 new North America restaurants and 50 new International restaurants in 2016. Global net new restaurant openings totaled 58 in 2016. At the end of 2016, approximately 32 percent of the global system features our new image.
Board authorizes increase in quarterly dividend rate and new share repurchase program In 2016, the Company repurchased 29.5 million shares for $335.0 million at an average price of $11.34 per share. The number of shares outstanding at the end of the fourth quarter of 2016 was approximately 246.6 million.
The Company announced today that its Board of Directors has authorized an increase of 0.5 cents per share in its quarterly dividend rate. The Company's new quarterly dividend rate of 7 cents per share will be effective with its next dividend payment on March 15, 2017to shareholders of record as of March 1, 2017. This increase is in addition to the 0.5 cents per share increase that was authorized in the fourth quarter of 2016.
The Company also announced today that its Board of Directors authorized a new share repurchase program for up to $150 million of the Company's common stock through March 4, 2018. The Company intends to repurchase shares with existing cash on its balance sheet and cash flow from operations.
Cracker Barrel Reports Results for Second Quarter Fiscal 2017 and Reaffirms Earnings Guidance for Fiscal 2017
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) today reported its financial results for the second quarter of fiscal 2017 ended January 27, 2017.
Second Quarter Fiscal 2017 Highlights
- Compared to the prior year second quarter, comparable store restaurant sales increased 0.6%, marking the Company's eleventh consecutive quarter of positive comparable store restaurant sales.
- Operating income as a percent of total revenue increased 150 basis points, over the prior year quarter, to 10.7%.
- Earnings per diluted share were $2.19, compared to GAAP earnings per diluted share of $2.01 in the prior year quarter, an increase of 9.0%. Adjusted for the impact of the prior year retroactive reinstatement of the Work Opportunity Tax Credit ("WOTC"), earnings per diluted share increased 15% from adjusted EPS of $1.91 in the prior year quarter. (See non-GAAP reconciliation below.)
Commenting on the second quarter, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "I am pleased to report another significant increase in earnings per diluted share. We delivered second quarter operating margin growth largely driven by continued commodity favorability and the success of our cost reduction initiatives. As we look to the second half of this fiscal year, our teams remain focused on executing at the store level, providing the great food, friendly service, welcoming atmosphere and retail shopping experience that differentiates our brand from our competitors."
Second Quarter Fiscal 2017 Results
The Company reported total revenue of $772.7 million for the second quarter of fiscal 2017, representing an increase of 1.1% over the second quarter of the prior year. Comparable store restaurant sales increased 0.6%, including a 2.7% increase in average check partially offset by a 2.1% decrease in comparable store restaurant traffic. The average menu price increase for the quarter was approximately 2.1%. Comparable store retail sales decreased 2.2% from the prior year quarter.
Comparable store restaurant traffic, average check and comparable store restaurant sales and retail sales for the fiscal months of November, December and January and the second quarter were as follows:
Comparable restaurant traffic
Comparable restaurant sales
Comparable retail sales
(1) The Company estimates inclement weather in December reduced traffic and sales by approximately 1.6%.
(2) The Company estimates the Christmas fiscal calendar timing shift, from fiscal December in the prior year to fiscal January in the current year, increased December traffic and sales by approximately 5.7% while reducing January traffic and sales by approximately 5.0%.
Operating income in the second quarter was $82.7 million, or 10.7% of total revenue, an increase over the prior year quarter result of $70.5 million, or 9.2% of total revenue. As a percentage of total revenue, reductions in cost of goods sold, other store operating expenses, and general and administrative expenses were partially offset by an increase in labor and related expenses.
Diluted Earnings per Share
Earnings per diluted share were $2.19, compared to GAAP EPS of $2.01 in the prior year quarter, an increase of 9.0%. Adjusted for the impact of the prior year retroactive reinstatement of the Work Opportunity Tax Credit, earnings per diluted share increased 15% from adjusted EPS of $1.91 in the prior year quarter. (For a reconciliation of GAAP to non-GAAP financial measures, please see the tables accompanying this release.)
Fiscal 2017 Outlook
The Company reaffirmed its previous earnings guidance and expects to report earnings per diluted share for the 2017 fiscal year between $8.10 and $8.25. The Company now expects total revenue of approximately $2.95 billion, reflecting the expected opening of eight new Cracker Barrel stores and four new Holler & Dash Biscuit House restaurants. The Company now expects comparable store restaurant sales of between 0.5% and 1.0% and comparable store retail sales of approximately -2.0%, reflecting the Company's more cautious expectations for the second half of the fiscal year. The Company expects food commodity deflation of approximately 4.0% for the year. The Company projects an operating income margin in the range of 10.0% and 10.5% of total revenue for fiscal 2017. The Company expects depreciation expense between $85 million and $87 million; net interest expense of approximately $15 million; and capital expenditures of approximately $125 million. The Company anticipates an effective tax rate for fiscal 2017 of approximately 32%.
The Company expects to report earnings per diluted share for the third quarter of 2017 of between $1.75 and $1.85. The Company reminds investors that its outlook for fiscal 2017 reflects a number of assumptions, many of which are outside the Company's control.
About Cracker Barrel Old Country Store
Cracker Barrel Old Country Store provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that's surprisingly unique, genuinely fun and reminiscent of America's country heritage…all at a fair price. The restaurants serve up delicious, home-style country food such as meatloaf and homemade chicken n' dumplins as well as our signature biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn. and operates 641 company-owned Cracker Barrel locations and four company-owned Holler & Dash Biscuit House locations across 43 states. Every Cracker Barrel store is open seven days a week with hours Sunday through Thursday, 6 a.m. – 10 p.m., and Friday and Saturday, 6 a.m. - 11 p.m.
PAPA JOHN'S ANNOUNCES FOURTH QUARTER 2016 RESULTS
LOUISVILLE, Ky.--(BUSINESS WIRE)-- Papa John's International, Inc. (NASDAQ: PZZA) today announced financial results for the three months and full year ended December 25, 2016.
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- GAAP earnings per diluted share of $0.88 and adjusted earnings per diluted share of $0.69 in the fourth quarter of 2016, excluding Special Items; adjusted earnings per diluted share up 11% over 2015
- GAAP earnings per diluted share of $2.74 and adjusted earnings per diluted share of $2.55 for full year 2016, excluding Special Items; adjusted earnings per diluted share up 22% over 2015 adjusted earnings per diluted share
- System-wide North America comparable sales increases of 3.8% for the fourth quarter and 3.5% for the full year
- International comparable sales increases of 5.6% for the fourth quarter and 6.0% for the full year
- 126 worldwide net unit openings in the fourth quarter and 204 for the full year, of which 151 were International and 53 were in North America
"We are pleased to have delivered another excellent year in 2016," said Papa John's founder, chairman and CEO, John Schnatter. "Thanks to the efforts of the entire Papa John's family, we opened our 5,000th global unit and increased our digital mix to over 55% -- all while delivering on our clear label promises and generating strong comp sales and another year of record earnings."
Fourth quarter 2016 revenues were $439.6 million, a 5.5% increase from fourth quarter 2015 revenues of $416.8 million. Full year 2016 revenues were $1.71 billion, a 4.7% increase from full year 2015 revenues of $1.64 billion.
GAAP and adjusted net income and diluted earnings per share ("EPS") excluding Special Items results are summarized below:
|Three Months Ended||Year Ended|
|GAAP net income||$||32,630||$||24,695||32.1||%||$||102,820||$||75,682||35.9||%|
|Adjusted net income||$||25,608||$||24,695||3.7||%||$||95,798||$||83,668||14.5||%|
|GAAP diluted EPS||$||0.88||$||0.62||41.9||%||$||2.74||$||1.89||45.0||%|
|Adjusted diluted EPS||$||0.69||$||0.62||11.3||%||$||2.55||$||2.09||22.0||%|
Special Items include a refranchising gain in 2016 from the sale of the 42 restaurant Phoenix company-owned market to a franchisee, an impairment charge in 2016 related to our company-owned stores in China that are currently for sale, and the finalization of a 2015 legal settlement that was paid in 2016. See "Items Impacting Comparability- Non-GAAP Presentation" table on page 8 for more details.
Global Restaurant and Comparable Sales Information
|Three Months Ended||Year Ended|
|Global restaurant sales growth (a)||5.3||%||
Global restaurant sales growth, excluding the impact of foreign currency (a)
|Comparable sales growth (b)|
|Domestic company-owned restaurants||4.8||%||3.4||%||4.4||%||5.9||%|
|North America franchised restaurants||3.4||%||1.3||%||3.1||%||3.6||%|
|System-wide North America restaurants||3.8||%||1.9||%||3.5||%||4.2||%|
|System-wide international restaurants||5.6||%||5.3||%||6.0||%||6.9||%|
(a) Includes both company-owned and franchised restaurant sales.
(b) Represents the change in year-over-year sales for the same base of restaurants for the same fiscal periods. Comparable sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation.
We believe global restaurant and comparable sales growth information, as defined in the table above, is useful in analyzing our results since our franchisees pay royalties that are based on a percentage of franchise sales. Franchise sales generate commissary revenue in the United States and in certain international markets. Global restaurant and comparable sales growth information is also useful in analyzing industry trends and the strength of our brand. Management believes the presentation of global restaurant sales growth excluding the impact of foreign currency provides investors with useful information regarding underlying sales trends by presenting sales growth excluding the external factor of foreign currency exchange. Franchise restaurant sales are not included in company revenues.
Texas Roadhouse stock plunges on sales fears
Stock down 12 percent amid disappointing same-store sales
Same-store sales at Texas Roadhouse Inc. ended 2016 on a bad note, sending the company’s stock down nearly 13 percent on Wednesday.
The Louisville-based casual-dining chain reported same-store sales of 1.2 percent in the quarter ended Dec. 27. Sales are slightly better so far in 2017, up 1.5 percent, the company said on Wednesday. And the chain still expects positive same-store sales in 2017.
That’s good, considering the notoriously weak sales at many of the company’s competitors.
But to investors, who had bid the stock up by more than a third since October, the numbers were disappointing, a sign that the chain is not immune to the problems afflicting the casual dining sector.
Same-store sales fell 2.1 percent in December. And the overall quarterly results were lower than they’d been all year for the chain, which reported 3.5 percent same-store sales growth at company locations for the full year.
“While the casual-dining industry is experiencing difficult times, challenges such as these have always existed to some degree,” Kent Taylor, the company’s CEO, said on the earnings call late on Tuesday. “We will continue to tackle them head on.”
Revenues in the quarter increased 7 percent to $484.7 million, from $454.4 million.
Net income declined 10 percent, meanwhile, to $20.7 million or 29 cents per share, from $23 million or 32 cents.
The company also said that restaurant margin as a percent of sales fell 44 basis points to 17.1 percent — as rising labor costs, which are hitting the industry hard, offset lower food costs in the period. Executives said that labor as a percent of sales increased 147 basis points.
Higher wage rates and the impact of overtime pay changes were behind the higher labor costs, the company said.
Food costs, however, fell by 2.9 percent, thanks largely to lower beef prices.
Texas Roadhouse opened 30 locations in 2016, including nine of its new Bubba’s 33 concept.
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Popeyes sells to RBI for 21x-trailing EBITDA, the highest multiple ever paid for a public restaurant company
Burger King’s owner buys Popeyes for $1.8B
Restaurant Brands International Inc. on Tuesday said it has agreed to buy Popeyes Louisiana Kitchen Inc. for $79 per share, or $1.8 billion.
The deal gives the Oakville, Ontario-based RBI a third brand to go along with Burger King and Tim Hortons. It also gives the company a brand with significant growth potential in its home market.
RBI also promises to pick up the pace of growth at Popeyes, both in its home market and in international markets. Popeyes has more than 2,600 locations, most in the U.S. That move would fit with RBI’s overall strategy, which has revolved primarily around aggressive unit growth of its two brands.
“Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” Restaurant Brands CEO Daniel Schwartz said in a statement.
“With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international
RBI gets a brand that under CEO Cheryl Bachelder has become one of the strongest performing quick-service chains on Wall Street.
“I am proud of the superior results the Popeyes team has delivered in recent years,” Bachelder said in a statement. “RBI has observed our success and seen the opportunity for exceptional future unit growth in the U.S. and around the world. The result is a transaction that delivers immediate and certain value to the Popeyes shareholders."
The price for Popeyes is a 27-percent premium based on the chicken chain’s 30-day trading average as of Feb. 10 — the last trading day before reports suggested that RBI was in the market for Popeyes. RBI is financing the deal with cash on hand and financing from J.P. Morgan and Wells Fargo.
Recent reports have suggested that Restaurant Brands was looking at the chicken chain, while others said the company had backed off. Yet Bloomberg reported on Monday that talks had begun again and that there was enough momentum for a deal.
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DENNY’S CORPORATION REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2016
SPARTANBURG, S.C., Feb. 15, 2017 (GLOBE NEWSWIRE) -- Denny’s Corporation (NASDAQ:DENN), franchisor and operator of one of America's largest franchised full-service restaurant chains, today reported results for its fourth quarter and full year ended December 28, 2016.
Full Year 2016 Highlights
- Domestic system-wide same-store sales increased 0.9%, including an increase of 1.1% at company restaurants and an increase of 0.8% at domestic franchised restaurants.
- Opened 50 system restaurants including 14 international franchised locations.
- Completed 240 remodels including 27 at company restaurants.
- Company restaurant operating margin grew 11.1% to $65.2 million while franchise operating margin grew 4.2% to $98.8 million.
- Net Income was $19.4 million, or $0.25 per diluted share, including a pre-tax settlement loss of $24.3 million resulting from the Company's pension plan liquidation.
- Adjusted Net Income* grew 15.2% to $42.3 million while Adjusted Net Income per Share* grew 26.5% to $0.55.
- Adjusted EBITDA* improved by 12.0% to $99.4 million.
- Generated $51.1 million of Free Cash Flow*, after cash capital expenditures of $34.0 million.
- Allocated $58.7 million towards share repurchases.
Fourth Quarter Highlights
- Domestic system-wide same-store sales increased 0.5%, including an increase of 0.1% at company restaurants and an increase of 0.6% at domestic franchised restaurants.
- Opened 12 system restaurants including four international franchised locations.
- Completed 51 remodels including 10 at company restaurants.
- Company restaurant operating margin expanded 22.3% to $16.6 million while franchise operating margin grew 3.7% to $25.2 million.
- Net Income increased 28.7% to $11.3 million, or $0.15 per diluted share.
- Adjusted Net Income* grew 41.3% to $12.6 million while Adjusted Net Income per Share* grew 52.9% to $0.17.
- Adjusted EBITDA* improved by 17.8% to $25.8 million.
- Generated $14.4 million of Free Cash Flow*, after cash capital expenditures of $6.5 million.
- Allocated $39.0 million towards share repurchases.
"We are pleased with our performance during the fourth quarter and full year, particularly in light of the pervasive challenges within the restaurant industry," commented John Miller, Denny's President and Chief Executive Officer. "Throughout the year, we continued to successfully execute our brand revitalization strategy and delivered an improved and differentiated experience for our guests across food, service, and atmosphere. These efforts resulted in market share gains and impressive growth in company and franchise margins. In addition, we delivered our best year of unit expansion in the past five years. Moving forward, despite an uncertain industry outlook, Denny's remains committed to further elevating the guest experience, consistently growing same-store sales, and expanding the brand across the globe, leading to value creation for all franchisees and shareholders."
Fourth Quarter Results
Denny’s domestic system-wide same-store sales increased 0.5%, including a 0.1% increase at company restaurants and a 0.6% increase at domestic franchised restaurants. During the quarter, the Company acquired one franchised restaurant. Denny’s franchisees opened 12 restaurants and closed seven restaurants, bringing the total number of restaurants to 1,733.
Denny’s total operating revenue grew 4.5% to $129.6 million due to an increase in both company restaurant sales and franchise royalties. Company restaurant sales improved 6.1% to $94.6 million due to a greater number of company restaurants compared to the prior year quarter and same-store sales growth. Franchise and licensing revenue grew 0.5% to $35.0 million primarily due to higher royalty revenue, partially offset by a decrease in occupancy revenue.
Company restaurant operating margin of $16.6 million, or 17.5% of company restaurant sales, increased $3.0 million, or 230 basis points. Franchise operating margin of $25.2 million, or 72.1% of franchise and licensing revenue, increased $0.9 million, or 220 basis points.
Total general and administrative expenses were $17.3 million compared to $16.8 million in the prior year quarter as lower incentive compensation was offset by higher stock-based compensation. Interest expense of $3.3 million increased $0.7 million due to higher borrowings compared to the prior year quarter. Denny’s ended the quarter with $245.6 million of total debt outstanding, including $218.5 million of borrowings under its revolving credit facility. Depreciation and amortization expense of $6.0 million increased $0.3 million.
The provision for income taxes was $1.9 million, reflecting an effective tax rate of 14.4%. During the quarter, amended federal tax returns for prior years were filed in order to claim foreign tax credits in lieu of foreign tax deductions. These returns generated $1.7 million in additional tax credits and $0.9 million in federal income tax refunds. The Company paid $1.9 million in cash taxes during the quarter.
Denny's Net Income of $11.3 million, or $0.15 per diluted share, grew 28.7%. Adjusted Net Income per Share* of $0.17 grew 52.9% compared to the prior year quarter and included $0.04 per share resulting from the amended tax return filings.
Free Cash Flow* and Capital Allocation
Denny’s generated $14.4 million of Free Cash Flow* in the quarter after investing $6.5 million in cash capital expenditures, including the acquisition of one franchised restaurant and the remodeling of 10 company restaurants.
During the quarter, the Company allocated $39.0 million to share repurchases, including a $25.0 million accelerated share repurchase agreement entered into in November 2016 and completed in February 2017. As part of this agreement, approximately 1.5 million shares were repurchased during the fourth quarter and approximately 0.5 million shares were repurchased following the close of the fourth quarter. As of December 28, 2016, the Company had approximately $79 million remaining in authorized share repurchases, including the impact of the accelerated share repurchase agreement.
The following full year 2017 estimates are based on management’s expectations at this time.
- Same-store sales growth at company and domestic franchised restaurants between 0% and 2%.
- 45 to 50 new restaurant openings, with net restaurant growth of 10 to 20 restaurants.
- Total operating revenue between $523 and $532 million including franchise and licensing revenue between $140 and $142 million.
- Company restaurant margin between 17.5% and 18% and franchise restaurant margin between 71% and 71.5%.
- Total general and administrative expenses between $68 and $71 million.
- Adjusted EBITDA* between $101 and $103 million.
- Depreciation and amortization expense between $23 and $24 million.
- Net interest expense between $12.5 and $13 million.
- Effective income tax rate between 35% and 37% with cash taxes between $7 and $9 million.
- Cash capital expenditures between $22 and $24 million including the relocation of three high-performing company restaurants due to impending loss of property control.
- Free Cash Flow* between $58 and $60 million.
* Adjusted Net Income excludes debt refinancing charges, impairment charges, gains on sales of assets, and other adjustments including the pension settlement loss. The forward looking non-GAAP estimates set forth above are provided only on a non-GAAP basis. The Company is not able to reconcile these forward-looking non-GAAP estimates to their most directly comparable GAAP estimates without unreasonable efforts because it is unable to predict or forecast the items impacting these estimates with a reasonable degree of accuracy. The Company is unable to determine the probable significance of the unavailable information. Please refer to the historical reconciliation of Net Income to Adjusted Income Before Taxes, Adjusted Net Income, Adjusted Net Income per Share, Adjusted EBITDA, and Free Cash Flow included in the following tables.
Conference Call and Webcast Information
Denny’s will provide further commentary on the results for the fourth quarter and full year ended December 28, 2016 on its quarterly investor conference call today, Wednesday, February 15, 2017 at 4:30 p.m. Eastern Time. Interested parties are invited to listen to a live broadcast of the conference call accessible through the investor relations section of Denny’s website at investor.dennys.com. A replay of the call may be accessed at the same location later in the day and will remain available for 30 days.
Denny's Corporation is the franchisor and operator of one of America's largest franchised full-service restaurant chains, based on the number of restaurants. As of December 28, 2016, Denny’s had 1,733 franchised, licensed, and company restaurants around the world with combined sales of $2.8 billion including 123 restaurants in Canada, Puerto Rico, Mexico, New Zealand, Honduras, Costa Rica, Dominican Republic, the United Arab Emirates, Guam, the Philippines, Curaçao, El Salvador, and Trinidad and Tobago. For further information on Denny's, including news releases, links to SEC filings, and other financial information, please visit the Denny's investor relations website at investor.dennys.com.
Dunkin' Brands Reports Fourth Quarter and Fiscal Year 2016 Results
Fiscal year 2016 highlights include:
- Dunkin' Donuts U.S. comparable store sales growth of 1.6%
- Baskin-Robbins U.S. comparable store sales growth of 0.7%
- Added 723 net new restaurants worldwide, including 397 net new Dunkin' Donuts in the U.S.
- Revenues increased 2.2%, or 1.1% on a 52-week basis
- Diluted EPS increased 95.4% to $2.11, or 92.6% to $2.08 on a 52-week basis
- Diluted adjusted EPS increased 17.1% to $2.26, or 15.5% to $2.23 on a 52-week basis
Fourth quarter highlights include:
- Dunkin' Donuts U.S. comparable store sales growth of 1.9%
- Baskin-Robbins U.S. comparable store sales decline of 0.9%
- Added 296 net new restaurants worldwide, including 199 net new Dunkin' Donuts in the U.S.
- Revenues increased 5.8%, or 1.5% on a 13-week basis
- Diluted EPS increased $0.71 to $0.61, or $0.68 to $0.58 on a 13-week basis
- Diluted adjusted EPS increased 23.1% to $0.64, or 17.3% to $0.61 on a 13-week basis
Dunkin' Brands Group, Inc. (Nasdaq: DNKN), the parent company of Dunkin' Donuts (DD) and Baskin-Robbins (BR), today reported results for the 14-week fiscal fourth quarter and 53-week fiscal year ended December 31, 2016.
"This past year was one of significant achievement for Dunkin' Donuts U.S. We began executing against a six-part strategy to drive growth by positioning Dunkin' as a to-go, coffee beverages brand, and while much work remains, we made considerable progress with our plan, in particular with utilizing digital technology to drive customer loyalty and store traffic. We now have more than 6 million Perks members, have launched On-The-Go ordering nationally, have grown mobile payments by nearly 70 percent, and had nearly $1 billionin systemwide sales on the Dunkin' Gift Card, the backbone of our digital ecosystem, as a form of payment," said Nigel Travis, Dunkin' Brands Chairman and CEO. "We also made considerable progress with our efforts to increase consumption of Dunkin' Donuts coffee through our consumer packaged goods initiative and last summer signed an agreement with The Coca-Cola Company, along with its bottling partners, to manufacture, distribute and sell Dunkin' Donuts branded ready-to-drink bottled iced coffee beverages. Between retail sales of Dunkin' bottled iced coffee, K-Cups, bagged coffee and in-restaurant system-wide sales of ready-brewed coffee, we expect consumers to drink nearly 5 billion cups of Dunkin' Donuts coffee globally in 2017."
"We're proud to have delivered our operating income growth target and exceeded our earnings per share target for the fiscal year 2016. Additionally, we're pleased to announce this morning that the Board of Directors increased our quarterly dividend by 7.5 percent over the prior quarter," said Paul Carbone, Dunkin' Brands Chief Financial Officer.
Restaurant Brands International Inc. Reports Full Year and Fourth Quarter 2016 Results
Tim Hortons comparable sales increased 2.5% and Burger King comparable sales increased 2.3% in constant currency
Restaurant Brands International Inc. (TSX/NYSE: QSR, TSX: QSP) today reported financial results for the full year and fourth quarter ended December 31, 2016.
Daniel Schwartz, Chief Executive Officer of Restaurant Brands International Inc. ("RBI"), commented, "We are pleased to report another year of solid results, with strong financial performance in the fourth quarter. Our continued focus on guest satisfaction and value creation for all of our stakeholders has resulted in accelerated restaurant development and continued system-wide sales growth at both of our iconic brands, TIM HORTONS® and BURGER KING®. We are excited about our progress this year and are committed to building on these results to achieve long-term sustainable growth."
Full Year 2016 Highlights:
- RBI Total Revenues of $4,145.8 million versus $4,052.2 million in prior year
- RBI Net Income Attributable to Common Shareholders of $345.6 million versus $103.9 million in prior year
- RBI Diluted EPS of $1.45 versus $0.50 in prior year
- Tim Hortons ("TH") comparable sales increased 2.5% and Burger King ("BK") comparable sales increased 2.3% in constant currency
- Restaurant count increased 4.5% at TH and 4.9% at BK year-over-year
- System-wide sales grew 5.2% at TH and 7.8% at BK in constant currency
- RBI Adjusted EBITDA of $1,888.2 million was up 16.4% on an organic basis versus prior year results
- RBI Adjusted Diluted EPS of $1.58 was up 45.0% versus prior year results
- RBI declared dividends of $0.62 per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership in 2016, up 40.9% versus prior year declared dividends
Fourth Quarter 2016 Highlights:
- RBI Total Revenues of $1,111.4 million versus $1,057.0 million in prior year period
- RBI Net Income Attributable to Common Shareholders of $118.4 million versus $51.7 million in prior year period
- RBI Diluted EPS of $0.50 versus $0.25 in prior year period
- TH comparable sales increased 0.2% and BK comparable sales increased 2.8% in constant currency
- System-wide sales grew 2.4% at TH and 8.5% at BK in constant currency
- RBI Adjusted EBITDA of $512.4 million was up 16.4% on an organic basis versus prior year results
- RBI Adjusted Diluted EPS of $0.44 was up 37.5% versus prior year results