Diversified Restaurant Holdings (SAUC) Misses Q4 EPS by 6c, Revenues Beat, Same-Store Sales Up 2.2%

Diversified Restaurant Holdings (NASDAQ: SAUC) reported Q4 EPS of ($0.07), $0.06 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $39.1 million versus the consensus estimate of $37.9 million.

• Revenue for the quarter totaled $39.1 million and was $153.1 million for the year
• Achieved same-store sales growth of 2.2% in the fourth quarter; first positive quarter since 2015
• Operating loss of $1.5 million in the quarter, which included a $2.8 million asset impairment charge; operating loss was $0.4 million for the year
• Net loss was $2.3 million in the quarter and $5.0 million for the year
• Restaurant-level EBITDA(1) margin was 14.3% for the quarter and 15.2% for the year
• Adjusted EBITDA(1) was $3.8 million for the quarter and $15.8 million for the year
• Total debt was down $11.6 million to $102.4 million at year-end

“We continue to be energized and excited by the changes that are being implemented by our franchisor and are starting to reap the early benefits of the new marketing, media and promotional initiatives,” commented David G. Burke, President and CEO. “We achieved our first positive quarterly same-store sales result in three years and we believe there is a lot of room to continue to build on this momentum as these changes gain traction and future initiatives continue to roll out. We are especially encouraged with the early read into 2019. Same-store sales through early March continue to trend positive, despite severe weather across most of our regions, with the excitement of March madness in front of us.

“To capitalize on the NCAA tournament and to complement our focus to be The Great American Sports Bar, there will be a strong traffic-driving media strategy alongside a new menu design, new and improved food offerings and enhanced food presentation. Equally important are the number of initiatives taking place behind the scenes, as we implement new training and engagement tools to drive better team member retention and improve the overall customer experience. We are on the path to achieve the eagerly awaited relaunch of the brand this fall.”

Mr. Burke concluded, “We are uniquely positioned to benefit from Inspire Brands plans to rebuild the Buffalo Wild Wings brand. With the resurgence of the brand combined with our operating expertise, we believe we can achieve strong long-term growth and margin performance.”

For earnings history and earnings-related data on Diversified Restaurant Holdings (SAUC) click here.

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