What is in this article?:
- Fiesta to â€˜fine-tune and evolve brandsâ€™ in 2014
- A detailed expansion plan
Company eyes growth for Pollo Tropical, Taco Cabana in pivotal year
This is a pivotal year for Fiesta Restaurant Group Inc., parent to the Pollo Tropical and Taco Cabana brands, president and chief executive Tim Taft said Tuesday.
This year, the company will “fine-tune and evolve our brands, enter new markets, accelerate development and ensure that we position ourselves for sustainable growth well into the future,” Taft said in a call with analysts after reporting strong second-quarter results.
The company’s achievements to date “support the confidence we have in our direction,” he added.
Net income for the second quarter ended June 29 rose 87.4 percent, to $9.3 million, or 35 cents a share, from $5 million, or 21 cents a share, in the prior-year period, Addison, Texas-based Fiesta reported Tuesday. Revenue increased 9.4 percent, to $154.2 million, from $149.9 million in the same quarter last year.
The revenue increase was “due the impact of 18 new company restaurant openings over the past year and comparable restaurant sales growth at both brands,” Fiesta chief financial officer Lynn Schweinfurth said.
Same-store sales at Pollo Tropical increased 6.7 percent during the quarter, and comps at Taco Cabana rose 2.8 percent.
“So far, the comparable sales growth momentum experienced in the second quarter has continued in the third quarter, with third-quarter to-date comp sales of 5.2 percent at Pollo and 2.2 percent at Taco [Cabana],” Schweinfurth said.
In a research note, Piper Jaffray & Co. senior research analyst Nicole Miller Regan called the company’s third-quarter same-store sales momentum “industry leading.”
Bryan Elliott, a Raymond James & Associates analyst, wrote in a note Wednesday: “Despite widespread industry softness, Pollo Tropical is sustaining very strong comp momentum, and early sales results in the recently entered Texas market affirms our favorable view regarding the brand’s key points of differentiation and open-ended growth potential. We are also encouraged by solid comp and margin trends at the more mature Taco Cabana concept, which also continued to buck soft industry trends.”
The first Pollo Tropical restaurant opened in March near the company’s headquarters in Addison. A second location opened in the market in July.
“Both Texas openings are exceeding our expectations,” Taft said. “We attribute this earlier traction to having applied insights from prior restaurant openings in Jacksonville [Fla.], Georgia and Nashville [Tenn.] to tweak and evolve the brand. This has culminated in initial volumes in Texas that are similar to some of our Florida-based restaurants.”
The company is targeting 22 to 26 new company-owned restaurants this year. Those include 20 to 22 Pollo Tropical locations, two Taco Cabana units and two Cabana Grill restaurants.