Carrols Restaurant Group (TAST) Misses Q1 EPS by 3c, Revenues Miss; Withdraws FY20 Guidance

Carrols Restaurant Group (NASDAQ: TAST) reported Q1 EPS of ($0.38), $0.03 worse than the analyst estimate of ($0.35). Revenue for the quarter came in at $351.5 million versus the consensus estimate of $366.86 million.

Highlights for the First Quarter of 2020 versus the First Quarter of 2019 Include:

• Total revenue increased 20.9% to $351.5 million (including $67.4 million in restaurant sales from restaurants acquired in the Cambridge acquisition completed in the second quarter of 2019) from $290.8 million in the prior year quarter;
• Comparable restaurant sales for the Company’s Burger King® restaurants decreased 5.7% compared to a 2.4% increase in the prior year quarter, and during the last month of the quarter comparable restaurant sales decreased 16.8%;
• Comparable restaurant sales for the Company’s Popeyes® restaurants increased 3.2% compared to comparable restaurant sales under previous ownership in the prior year quarter, and during the last month of the quarter comparable restaurant sales decreased 2.8%;
• Adjusted EBITDA(1) was $4.0 million compared to $13.3 million in the prior year quarter;
• Adjusted Restaurant-Level EBITDA(1) was $22.8 million compared to $28.7 million in the prior year quarter;
• Net loss was $22.2 million, or $0.44 per diluted share, compared to net loss of $11.5 million, or $0.32 per diluted share, in the prior year quarter; and
• Adjusted Net Loss(1) was $19.3 million, or $0.38 per diluted share, compared to Adjusted Net Loss of $10.2 million, or $0.28 per diluted share, in the prior year quarter.

Management Commentary

Daniel T. Accordino, Chairman and Chief Executive Officer of Carrols, commented, “While we began 2020 with renewed optimism, we and our fellow citizens were faced with a whole new set of challenges beginning in March due to COVID-19. We immediately took the necessary steps to ensure the safety and well-being of our employees and guests and then quickly and efficiently pivoted our business operations and improved our financial liquidity. On behalf of the management team, I would like to personally thank each and every one of our employees for their tremendous efforts in adapting our restaurant operations to the current environment and for their commitment to help feed America during this challenging time.”

Accordino concluded, “We are encouraged that our weekly trend for comparable restaurant sales has begun to stabilize and improve over the past few weeks and are hopeful that conditions will further strengthen as businesses begin to reopen and we return to a modified state of ‘normalcy’. Still, we cannot predict what the near-term future holds with any certainty and when or the manner in which the conditions surrounding the COVID-19 pandemic will change but we will be ready to make additional adjustments to our business as needed. Accordingly, we have withdrawn our full year 2020 guidance as it can no longer be relied upon.”

Withdrawal of Prior Full Year 2020 Outlook

Given the ongoing uncertainty around the magnitude and duration of the COVID-19 pandemic, we are withdrawing our previously issued guidance for the full year 2020.

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

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