SYRACUSE N.Y. Carrols Restaurant Group Inc., one of Burger King’s largest franchisees and the owner-operator of two fast-casual chains, did not provide guidance on 2010 sales and profit after reporting fourth-quarter results Thursday because of a cautious and uncertain outlook on the BK brand.
Full-year 2009 same-store sales fell 2.6 percent at Carrols’ Burger King restaurants, including a 3-percent decline in the fourth quarter. The company said it could not predict what 2010 would bring because of “continuing uncertainties with regard to the overall economy and consumer spending, and in particular, a lack of visibility regarding the key drivers of comparable sales for its Burger King restaurants.”
Burger King struggled through most of last year, especially as it tried to gain its footing on the pricing of its double cheeseburger and drastic discounting at rival chains. It dropped the price of the double cheeseburger to $1 for several months, but recently said the price would increase to $1.19 in April. Many quick-service chains have been experimenting with traffic-driving discount pricing as consumers look to spend less. They also have been hit by reduced consumer traffic at breakfast, once a strong foothold for the segment.
“The Burger King system ... has increasingly focused on the customers’ need for extreme affordability with very aggressive price-pointed promotional activities,” Alan Vituli, Carrols' chairman and chief executive, said in a statement. “We remain cautious about sales expectations for our Burger King restaurants in light of recent trends, the competitive environment and continuing pressures on consumer spending.”
For the fourth quarter ended Jan. 3, Carrols earned $4.1 million, or 19 cents per share, compared with earnings of $4.4 million, or 20 cents per share, in the same quarter a year earlier. Latest-quarter total revenue rose 4.4 percent to $209.7 million, reflecting an additional week of operation from a year ago.
Same-store sales increased 0.3 percent at Carrols’ Pollo Tropical chain and fell 4.5 percent at the Taco Cabana brand.
For the full year, Carrols earned $21.8 million, or $1.00 per share, versus earnings of $12.8 million, or 59 cents per share, when the company booked $5.5 million in impairment charges and $28 million in interest expense, both of which were cut in the latest year.
Syracuse, N.Y.-based Carrols operates 312 Burger King locations and operates or franchises 91 Pollo Tropical restaurants and 156 Taco Cabana units.
Contact Sarah E. Lockyer at [email protected].
