Fiesta Restauran (FRGI) Misses Q3 EPS by 4c

Fiesta Restauran (NASDAQ: FRGI) reported Q3 EPS of $0.33, $0.04 worse than the analyst estimate of $0.37. Revenue for the quarter came in at $172.1 million versus the consensus estimate of $176.77 million.

• Comparable restaurant sales at Pollo Tropical increased 4.2%, which includes a decrease in comparable guest traffic of 1.0%, largely driven by planned sales cannibalization of existing restaurants as a result of new restaurant openings and excessive rain in Florida.
• Comparable restaurant sales at Taco Cabana increased 4.8%, which includes a decrease in comparable guest traffic of 0.4%, largely driven by declining breakfast transactions related to nation-wide egg shortages.

2016 Initial Operating Targets

The Company is providing the following 2016 fiscal year initial operating targets:

• Low- to mid-single-digit comparable restaurant sales growth at both Pollo Tropical and Taco Cabana with modest price increases;
• As a percentage of restaurant sales, cost of sales is expected to decrease by 100 to 150 basis points to approximately 30% to 31%;
• General and administrative expenses of approximately $60 million to $62 million;
• An effective tax rate of approximately 37% to 39% assuming the Work Opportunity Tax Credit is not renewed or, if the tax credit is renewed, Fiesta expects an improvement to its effective tax rate of approximately 100 basis points;
• 40 to 44 Company-owned restaurant openings including up to four new Taco Cabana restaurants and the balance being Pollo Tropical restaurants, with one anticipated Pollo Tropical restaurant closure; and
• Capital expenditures between $95 million and $110 million.

For earnings history and earnings-related data on Fiesta Restauran (FRGI) click here.

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