Revenues increased 30 percent at Carrols Restaurant Group Inc in the second quarter, the Burger King franchisee said Tuesday, thanks to acquisitions and the franchisor’s flourishing sales performance.
But the Syracuse, N.Y.-based company reported a net loss of $5 million in the period ended June 28, thanks entirely to financing costs related to the operator’s recent refinancing.
Total revenues increased 30 percent to $219.1 million from $168.6 million in the period. Much of that, nearly $39 million, came from the addition of 127 Burger King locations after acquisitions last year and this year.
In addition, same-store sales at the franchisee increased 10.3 percent. The company increased its outlook for same-store sales for the full year to 5 to 7 percent from 3 to 5 percent.
“We were quite pleased with our outstanding results in the second quarter,” CEO Daniel Accordino said in a statement. “Burger King’s marketing and promotional activity was highly effective in driving sales and customer traffic during the quarter and we were very successful in leveraging those top-line gains into higher profitability from improving restaurant margins.”
Indeed, restaurant level EBITDA, or earnings before interest, taxes, depreciation and amortization, increased 80.5 percent to $35.6 million from $19.7 million a year ago. Restaurant level cash flow margin increased more than 450 basis points to 16.2 percent.
Operating income increased to $12.4 million from $1.6 million the same quarter a year ago.
The company said it has worked to integrate new restaurants into its portfolio, and has also remodeled more than 350 restaurants after the past three years.
Executives also hinted that they have room for additional expansion. Carrols has 657 Burger King locations, making it the chain’s largest franchisee, and has the pre-approval from the franchisor to operate as many as 1,000 locations.
“We have already made considerable progress integrating the restaurants acquired over the past year and we will continue to direct attention to those activities,” Acordino said. “After completing the recent refinancing we have more than $60 million in cash at the end of the second quarter and are well positioned for continued expansion.
“We are reviewing a number of opportunities and expect to opportunistically pursue additional acquisitions in the future.”
Contact Jonathan Maze at [email protected].
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