Carrols Restaurant Group (TAST) Tops Q2 EPS by 2c, Revenues Beat; Offers FY18 Revenue Outlook

Carrols Restaurant Group (NASDAQ: TAST) reported Q2 EPS of $0.22, $0.02 better than the analyst estimate of $0.20. Revenue for the quarter came in at $303 million versus the consensus estimate of $300.68 million.

• Restaurant sales increased 8.4% to $303.0 million from $279.5 million in the second quarter of 2017;
• Comparable restaurant sales increased a solid 5.0% compared to a 4.6% increase in the prior year quarter;
• Adjusted EBITDA(1) increased 19.4% to $32.8 million from $27.5 million in the prior year quarter;
• Net income was $7.8 million, or $0.17 per diluted share, compared to $6.0 million, or $0.13 per diluted share, in the prior year quarter; and
• Adjusted net income(1) increased 51% to $10.0 million, or $0.22 per diluted share, from $6.6 million, or $0.14 per diluted share, in the prior year quarter.

Daniel T. Accordino, the Company\'s Chief Executive Officer said, “We delivered a solid quarter reflecting 8.4% top line growth, a 5.0% increase in comparable restaurant sales, and we generated significant increases in Restaurant-level EBITDA and Adjusted EBITDA, which rose 16.7% and 19.4%, respectively. Sales were strong across all day parts and reflected continued success of the 2 for $6 mix and match promotion, and the popularity of the KING™ Sandwich line including the new Sourdough sandwiches. These offerings provided an effective balance to our value promotions and other limited time offers as part of the brand’s successful barbell menu strategy.”

Accordino added, “Our acquisition pipeline is active and we are currently working on several transactions. We recently exercised our right of first refusal for the purchase of 31 BURGER KING® restaurants in Virginia and two restaurants in Michigan. We expect that these transactions, along with a couple of other small acquisitions, will close before the end of the third quarter of 2018.”

Accordino concluded, “Given our performance year-to-date and expectations for the remainder of the year, we are raising our overall outlook for 2018. While we remain cautiously optimistic regarding comparable restaurant sales trends as we lap our very strong performance in the second half of last year, we expect Adjusted EBITDA to now grow to $100 million to $105 million compared to $91.4 million in 2017.”

GUIDANCE:

Carrols Restaurant Group sees FY2018 revenue of $1.16-1.18 billion, versus the consensus of $1.17 billion.

For earnings history and earnings-related data on Carrols Restaurant Group (TAST) click here.

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