Fiesta Restaurant (FRGI) Misses Q3 EPS by 9c

Fiesta Restaurant (NASDAQ: FRGI) reported Q3 EPS of $0.01, $0.09 worse than the analyst estimate of $0.10. Revenue for the quarter came in at $164.2 million versus the consensus estimate of $163.53 million. Comparable restaurant sales at Pollo Tropical decreased 3.8%; Comparable restaurant sales at Taco Cabana decreased 4.8%.

Fiesta President and Chief Executive Officer Richard Stockinger said, "Although quarterly comparable restaurant sales declined, we experienced sequential improvement at both brands as a result of our everyday value platform, LTO promotions and growing sales traction from our investments in off premise channels. In addition, third quarter comparable restaurant sales at Pollo Tropical were negatively impacted by Hurricane Dorian by approximately 150 basis points and by planned sales cannibalization of roughly 80 basis points. We were encouraged by the fact that Pollo Tropical comparable restaurant transactions exceeded the industry benchmark for the quarter and comparable restaurant sales were positive for the period in September following the hurricane, with improvement across all Florida markets. We launched Taco Cabana\'s value platform, \'TC Time\', in September, which helped drive the brand\'s comparable restaurant transactions above the industry benchmark index in Texas during the month."

Mr. Stockinger continued, "We continued to make strong progress during the quarter on our sales-building initiatives of menu innovation and simplification, everyday value platforms, and off premise dining including online, delivery and catering. The sales performance in September is only partially reflective of those efforts. We expect those investments will continue to accelerate results for the remainder of the year and into 2020. We also continue to focus on restaurant level margin improvement. Excluding the impact of lease accounting changes and the hurricane impact, Pollo Tropical restaurant margins would have increased, and Taco Cabana restaurant margins would have been flat to last year, despite the sales decline."

Mr. Stockinger added, "We were also very excited to have filled two more key positions in our senior leadership team during the third quarter. We named industry veteran Dirk Montgomery as our new CFO and Hope Diaz joined Fiesta as our new CMO. They each bring very strong capability and deep restaurant experience to Fiesta and they will help us accelerate the speed of our progress."

Mr. Stockinger concluded, "As we close out the year and look toward 2020, we expect stable food costs for the remainder of 2019 and 2020 vs. the prior year based on supply commitments in place across key commodities. We will maintain our focus on building sales growth across in store and off premise channels by continuing to enhance our brands\' attractiveness to guests."

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

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