Domestic same-store sales rose 2.8 percent at Dallas-based steak chain Fogo de Chão, but the company couldn’t keep up with the strong dollar or the previous year’s World Cup, so revenue fell, the company said Tuesday.
Revenue in the third quarter ended Sept. 27 was $61 million, compared with $63.7 million in the same period a year ago, a 4.2-percent decrease.
But when adjusted to factor out the World Cup in Brazil and the impact of foreign currency exchange, the company’s sales actually increased 7.4 percent. The strong dollar had a $5.5 million impact on revenue, and the decrease in sales in Brazil following last year’s World Cup had a $2.2 million impact on the chain of 37 high-volume restaurants.
In the U.S., restaurant revenue increased 9.2 percent, to $51 million, from $46.7 million a year ago, due to higher same-store sales and new unit development.
“We are pleased with our results this quarter and remain excited about the growth opportunities ahead,” Fogo de Chão CEO Larry Johnson said. “We are confident we can deliver long-term annual EPS [earnings per share] growth of 18 percent to 20 percent driven by expansion in our restaurant base, increase in comparable restaurant sales, leverage on operating and G&A [general and administrative] costs and preserving our strong four-wall restaurant margins as we go.”
Net income in the quarter rose nearly 74 percent, to $7.8 million, or 27 cents per share, from $4.5 million, or 20 cents per share. But when adjusted to factor out one-time costs and benefits, net income actually fell 25.5 percent, to $5.3 million, or 18 cents per share, from $7.1 million, or 24 cents per share.
The company plans to open a second location in the Las Vegas area this month, and a second restaurant in the Houston area, in The Woodlands, Texas. The company has three other restaurants under construction in San Francisco, New Orleans and Naperville, Ill. The chain plans to open up to six restaurants next year.
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