Del Taco Restaurants (TACO) Reports In-Line Q1 EPS; Guides In-Line

Del Taco Restaurants (NASDAQ: TACO) reported Q1 EPS of $0.08, in-line with the analyst estimate of $0.08. Revenue for the quarter came in at $97.4 million versus the consensus estimate of $96.09 million.

Comparable restaurant sales increased 3.2% system-wide for the fiscal first quarter ended March 22, 2016 compared to the 7.7% gain in the prior year fiscal first quarter, for a two-year growth rate of 10.9%.

Paul J.B. Murphy, III, President and Chief Executive Officer of Del Taco, commented, “We achieved solid quarterly results and are on track to deliver on our fiscal year outlook. The Del Taco system extended its record of system-wide comparable restaurant sales growth to ten consecutive quarters with a 3.2% gain, in spite of significant competitive discounting and cycling over a 7.7% increase in the prior-year. At company restaurants, we also generated restaurant contribution margin expansion through favorable menu mix shifts and effective menu price increases which helped offset cost pressures, including the California minimum wage increase to $10/hour. Our ability to operate effectively in this environment is a testament to the strength and resiliency of our brand, our positioning, and our menu strategy.”

Murphy continued, “In June, we plan to launch our Fresh Combined Solutions strategy. This next iteration of Combined Solutions consists of a combination of operational and brand improvements to further embed our fresh paired with value positioning, improve speed and quality, expand our usage occasions, and differentiate Del Taco through new and delicious Mexican food platforms. Driving brand reappraisal by aligning improved guest experiences with an elevated brand promise will help drive higher quality and freshness perceptions and move us toward our average unit volume goal of $1.5 million by 2018.”

GUIDANCE:

Del Taco Restaurants sees FY2016 EPS of $0.53-$0.56, versus the consensus of $0.54. Del Taco Restaurants sees FY2016 revenue of $439-449 million, versus the consensus of $445.7 million.

For earnings history and earnings-related data on Del Taco Restaurants (TACO) click here.

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