Carrols reports Q2 profit increase, raises outlook

SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST) on Aug. 7 reported net income of $7.8 million, or 17 cents per share, in the second quarter that ended July 1. That’s up 30 percent from $6 million, or 13 cents, in the same quarter in 2017, the firm said in its earnings report.

Syracuse–based Carrols, the world’s largest Burger King franchisee, is also raising its full-year outlook for 2018.

The company reported adjusted net income of $10 million, or 22 cents a share, an increase of 51 percent from $6.6 million, or 14 cents, in the prior-year quarter. Adjusted net income excludes one-time items such as impairment and other lease charges as well as acquisition costs, Carrols said.

Carrols said its restaurant sales totaled $303 million in the latest quarter, up more than 8 percent from $279.5 million in the second quarter of 2017. Comparable restaurant sales increased 5 percent compared to a 4.6 percent increase in the prior-year quarter. 

Carrols also reported adjusted EBITDA of $32.8 million, an increased more than 19 percent from $27.5 million in the second quarter a year ago. EBITDA is short for earnings before interest, taxes, depreciation, and amortization.

CEO reaction

Carrols delivered a “solid” quarter reflecting 8.4 percent top line growth, a 5 percent increase in comparable restaurant sales, and it generated “significant” increases in restaurant-level EBITDA and adjusted EBITDA, which rose 16.7 percent and 19.4 percent, respectively,” Daniel Accordino, CEO of Carrols Restaurant Group, said in the earnings report. 

“Sales were strong across all day parts and reflected continued success of the 2 for $6 mix and match promotion, and the popularity of the King sandwich line including the new Sourdough sandwiches. These offerings provided an effective balance to our value promotions and other limited time offers as part of the brand’s successful barbell menu strategy,” he said. 

Carrols’ acquisition “pipeline is active” with the firm currently working on several transactions, he added. 

 “We recently exercised our right of first refusal for the purchase of 31 Burger King restaurants in Virginia and two restaurants in Michigan. We expect that these transactions, along with a couple of other small acquisitions, will close before the end of the third quarter of 2018,” said Accordino. 

Carrols owned and operated 807 Burger King restaurants at the end of the second quarter of 2018, the firm said.

Carrols is also raising its overall outlook for 2018, “given our performance year-to-date and expectations for the remainder of the year, we are raising our overall outlook for 2018,” Accordino said. 

“While we remain cautiously optimistic regarding comparable restaurant sales trends as we lap our very strong performance in the second half of last year, we expect adjusted EBITDA to now grow to $100 million to $105 million compared to $91.4 million in 2017,” he added.

Raising outlook

Carrols is revising its guidance for 2018 which includes the anticipated acquisition of 37 Burger King restaurants that it expects to complete in the third quarter. 

At the same time, Carrols expects to close between 15 and 20 existing restaurants. Five of those restaurants “have already closed,” the company said. It had previously announced plans to close between 20 and 25 restaurants.

The firm is also expecting total restaurant sales of between $1.16 billion and $1.18 billion, which is up from its previous guidance of between $1.15 billion and $1.17 billion. 

The updated guidance includes a comparable restaurant sales increase of between 3 percent and 4 percent, which has been narrowed from the previously anticipated increase of between 3 percent and 5 percent.

SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST) on Aug. 7 reported net income of $7.8 million, or 17 cents per share, in the second quarter that ended July 1. That’s up 30 percent from $6 million, or 13 cents, in the same quarter in 2017, the firm said in its earnings report.

Syracuse–based Carrols, the world’s largest Burger King franchisee, is also raising its full-year outlook for 2018.

The company reported adjusted net income of $10 million, or 22 cents a share, an increase of 51 percent from $6.6 million, or 14 cents, in the prior-year quarter. Adjusted net income excludes one-time items such as impairment and other lease charges as well as acquisition costs, Carrols said.

Carrols said its restaurant sales totaled $303 million in the latest quarter, up more than 8 percent from $279.5 million in the second quarter of 2017. Comparable restaurant sales increased 5 percent compared to a 4.6 percent increase in the prior-year quarter. 

Carrols also reported adjusted EBITDA of $32.8 million, an increased more than 19 percent from $27.5 million in the second quarter a year ago. EBITDA is short for earnings before interest, taxes, depreciation, and amortization.

CEO reaction

Carrols delivered a “solid” quarter reflecting 8.4 percent top line growth, a 5 percent increase in comparable restaurant sales, and it generated “significant” increases in restaurant-level EBITDA and adjusted EBITDA, which rose 16.7 percent and 19.4 percent, respectively,” Daniel Accordino, CEO of Carrols Restaurant Group, said in the earnings report. 

“Sales were strong across all day parts and reflected continued success of the 2 for $6 mix and match promotion, and the popularity of the King sandwich line including the new Sourdough sandwiches. These offerings provided an effective balance to our value promotions and other limited time offers as part of the brand’s successful barbell menu strategy,” he said. 

Carrols’ acquisition “pipeline is active” with the firm currently working on several transactions, he added. 

 “We recently exercised our right of first refusal for the purchase of 31 Burger King restaurants in Virginia and two restaurants in Michigan. We expect that these transactions, along with a couple of other small acquisitions, will close before the end of the third quarter of 2018,” said Accordino. 

Carrols owned and operated 807 Burger King restaurants at the end of the second quarter of 2018, the firm said.

Carrols is also raising its overall outlook for 2018, “given our performance year-to-date and expectations for the remainder of the year, we are raising our overall outlook for 2018,” Accordino said. 

“While we remain cautiously optimistic regarding comparable restaurant sales trends as we lap our very strong performance in the second half of last year, we expect adjusted EBITDA to now grow to $100 million to $105 million compared to $91.4 million in 2017,” he added.

Raising outlook

Carrols is revising its guidance for 2018 which includes the anticipated acquisition of 37 Burger King restaurants that it expects to complete in the third quarter. 

At the same time, Carrols expects to close between 15 and 20 existing restaurants. Five of those restaurants “have already closed,” the company said. It had previously announced plans to close between 20 and 25 restaurants.

The firm is also expecting total restaurant sales of between $1.16 billion and $1.18 billion, which is up from its previous guidance of between $1.15 billion and $1.17 billion. 

The updated guidance includes a comparable restaurant sales increase of between 3 percent and 4 percent, which has been narrowed from the previously anticipated increase of between 3 percent and 5 percent.