SYRACUSE N.Y. Carrols Restaurant Group Inc., the largest Burger King franchisee and owner-operator of the Taco Cabana and Pollo Tropical brands, reported a dip in profit for its fourth quarter, as increased expenses and year-earlier gains overpowered sales increases, especially at its 322 Burger King restaurants.
Net income for the latest quarter ended Dec. 30 totaled $3.5 million, or 16 cents per share, compared with net income of $3.7 million, or 22 cents per share, in the year-earlier fourth quarter, which included a one-time gain of 6 cents per share and was based on a lower share count prior to the company’s initial public offering.
Revenues for the fourth quarter increased 4.5 percent to $197.2 million, aided by same-store sales gains of 4.6 percent at Burger King, 2.0 percent at Pollo Tropical and 0.9 percent at Taco Cabana.
For the year, net income rose to $15.1 million, or 70 cents per share, versus $13.4 million, or 83 cents per share, in the year earlier. Adjusting for the additional shares from the company’s IPO, per-share profit would have totaled 62 cents in fiscal 2006.
Latest-year total revenues increased 5.1 percent to $789.4 million. At year-end, the company operated 322 Burger Kings, 84 Pollo Tropical units and 147 Taco Cabana restaurants.
Looking ahead, Carrols said 2008 would be another challenging year.
“Diminishing consumer discretionary spending, existing weakness in the Florida economy and spiraling increases in operating costs have clouded the predictability of 2008 results,” Alan Vituli, chairman and chief executive, said in a statement.
Expectations include an increase in total revenues of between 5 percent and 6 percent, including same-store sales increases of between 2.5 percent and 3.5 percent at Burger King, between 1 percent and 2 percent at Pollo Tropical and between 1.5 percent and 2.5 percent at Taco Cabana.