Popeyes Louisiana Kitchen reported results for its fiscal second quarter of 2015, which ended July 12, 2015. Reported net income was $10.3 million, EPS $0.44, compared to $8.3 million, or EPS $0.35 in Q2 2014.
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Adjusted earnings per diluted share were $0.44, compared to $0.39 in 2014, representing an increase of 12.8%.
Global same-store sales increased 7.5% in 2015 compared to a 3.6% increase in 2014 for a two-year compounded growth rate of 11.4%. This positive sales growth reflects Popeyes' continued menu innovation, supported by expanded compelling advertising and strengthened restaurant execution.
Total domestic same-store sales increased 7.9%, compared to a 3.8% increase last year, for a two-year compounded growth rate of 12%. Popeyes' domestic same-store sales have outpaced the chicken-QSR segment for 29 consecutive quarters and overall QSR for 15 consecutive quarters, according to independent data.
Popeyes has increased its domestic market share of the chicken-QSR category to 25.4% compared to 23.1% last year.
International same-store sales increased 4.3%, compared to 2.2% last year, for a two year compounded growth rate of 6.6%.
The Popeyes system opened 37 restaurants, which included 18 domestic and 19 international restaurants, compared to 36 total openings in the same period last year. Net restaurant openings were 31, compared to 21 net restaurant openings in the same period last year.
As of the end of the second quarter in 2015, the company operated and franchised 2,443 restaurants, compared to 2,262 at the end of the second quarter in 2014, representing net unit growth of 8% over the last twelve months.
Total system-wide sales increased by 13.6% in the second quarter 2015 as a result of same store sales performance and net unit growth of the system.
Total revenues increased approximately 10.6% to $59.4 million in 2015 from $53.7 million in the prior year. The $5.7 increase in revenues was primarily due to a $2.8 million increase in sales by company-operated restaurants and a $3.5 million increase in franchise royalties.
Sales by company-operated restaurants and franchise royalties were driven by positive same store sales increases and net unit growth.
company-operated restaurant operating profit was $4.9 million, or 19.5% of sales, compared to $4.2 million, or 18.8% of sales in 2014. The improvement in company-operated restaurant operating profit margin was primarily attributable to improved labor controls.
Higher poultry and grocery basket costs were offset by targeted price increases and improved management of food, beverages and packaging.
Through the first 28 weeks of fiscal 2015, Operating EBITDA was $45.6 million, or 32.8% of total revenue, compared to $38.9 million, or 31.4% of total revenue, last year, a 17% increase.
Through the first 28 weeks of fiscal 2015, free cash flow was $31.3 million, compared to $24.2 million in 2014.
The company repurchased 260,207 shares of its common stock for approximately $15.0 million in the second quarter.
During the first quarter of 2015, Popeyes domestic freestanding franchised restaurants recorded average restaurant operating profit margins before rent of 23.5% compared to 23.4% during the first quarter of 2014.
Based on performance through the second quarter, the company is making the following changes to our guidance for full-year fiscal 2015:
Same-store sales growth in the range of 4.5% to 5.5%, an increase from previous guidance at the upper end of the range of 3.5% to 4.5%.
Adjusted earnings per diluted share in the range of $1.85 to $1.90, compared to previous guidance of $1.84 to $1.89.
Share repurchases of approximately $50 to $60 million, compared to previous guidance of $40 to $50 million. ■
A low pressure wave forming along a cold front will track across the New England coast this morning, bringing a period of rain, heavy at times for much of New England, especially for Maine today.