Popeyes Louisiana Kitchen (PLKI) Trims Top End of FY16 EPS Outlook, But In-Line with the Street

Popeyes Louisiana Kitchen, Inc. (NASDAQ: PLKI) reported selected unaudited results for its fiscal fourth quarter and fiscal year which ended December 25, 2016.

Popeyes Chief Executive Officer Cheryl Bachelder stated, “We are pleased to report another year of strong growth for the Popeyes brand. We generated annual global same-store sales growth of 1.7%. Our footprint continues to expand with 216 net new global openings: 118 domestic and 98 international. We are excited about our future and achieving our long term strategic growth goals. The Popeyes team remains dedicated to serving our franchisees well and creating value for our shareholders.”

Global same-store sales increased 2.8% in the fourth quarter with an increase in domestic same-store sales of 3.0%. The fourth quarter compounded two-year global same-store sales growth was 5.7%. For the full year, global same-store sales increased 1.7%. Annual compounded two-year global same-store sales growth was 7.7%.

During the fourth quarter, the Popeyes’ system opened 52 domestic and 37 international restaurants, bringing full year 2016 openings to 216 restaurants, compared to 219 restaurants last year. The Popeyes system permanently closed 57 restaurants in fiscal 2016, resulting in net new restaurant openings of 159 restaurants, compared to 166 net restaurants in 2015.

Based on its fourth quarter sales and store opening performance, the Company now expects fiscal 2016 reported earnings per diluted share ("EPS") will be in the range of $1.99 to $2.01, which includes impacts of asset impairments and other non-operating items. Adjusted earnings per diluted share are expected to be in the range of $2.10 to $2.12, compared to $1.91 in fiscal 2015, an increase of approximately 10%. The Company's previous guidance for adjusted earnings per share was $2.10 to $2.15.

The Company is currently in discussions with its lenders regarding a $150 million expansion of its current $250 million revolving credit facility with the intention to increase total leverage ratio to 2.5 to 3.5 times by the end of 2017. The Company plans to provide an update on uses of cash and additional debt capacity during its fourth quarter earnings call.

The Company’s Annual Report on Form 10-K for its fiscal year 2016, which ended December 25, 2016, will be filed on Wednesday, February 22, 2017, after market close. The Company will host a conference call on Thursday, February 23, 2017, at 9:00 a.m. Eastern Time to review results and provide guidance for fiscal 2017.

(1) Adjusted earnings per diluted share is a supplemental non-GAAP measure of performance. See the heading entitled "Management's Use of Non-GAAP Financial Measures."

Management’s Use of Non-GAAP Financial Measures

Adjusted earnings per diluted share: Calculation and Definition

The Company defines adjusted earnings for fiscal 2015 as the Company’s reported net income after adjusting for certain non-operating items consisting of the following: (i) other expenses (income) net of $0.4 million for recoveries under Deepwater Horizon Economic and Property Damages Settlement Program and $0.2 million net gain on the sale of assets offset by $0.5 million related to executive transition expenses and $0.1 million net loss on the sale and disposal of assets and (ii) the tax effect of these adjustments.

Adjusted earnings per diluted share provides the per share effect of adjusted net income on a diluted basis. The following table reconciles on a historical basis for fiscal 2015, the Company’s adjusted earnings per diluted share on a consolidated basis to the line on its Consolidated Statement of Operations entitled Net income, which the Company believes is the most directly comparable GAAP measure on its Consolidated Statement of Operations:

You May Also Be Interested In

• Integer Holdings Corp (ITGR) Tops Q1 EPS by 2c ; Offers Guidance
• Lakeland Financial (LKFN) Tops Q1 EPS by 2c
• Independent Bank (IBCP) Tops Q1 EPS by 12c