Diversified Restaurant Holdings (SAUC) Reports In-Line Q2 EPS

Diversified Restaurant Holdings (NASDAQ: SAUC) reported Q2 EPS of ($0.01), in-line with the analyst estimate of ($0.01). Revenue for the quarter came in at $46.39 million versus the consensus estimate of $47.15 million.

BWW comparable-store sales decline 2.7% against strong 4.1% increase in prior-year period; Bagger Dave’s average weekly sales up 5.1% to $22,600

ichael Ansley, President and CEO, commented, “We continue to make excellent progress in improving our financial performance. We increased second quarter sales by nearly 26%, generated significantly higher operating income and continued to reduce debt. The strong operating leverage from our expanded BWW franchise, rationalization of underperforming restaurants, reduced pace of unit development and cost reduction initiatives are demonstrating measurable results. Notably, we achieved these improvements even as our BWW comparable-store sales were off in the quarter consistent with challenges facing the entire casual dining sector.

“The Board’s decision to spin off Bagger Dave’s to the over the counter market will enable us to devote DRH’s energies and resources on our much larger BWW business, which should drive increased earnings power, cash generation and franchise expansion opportunities. Bagger Dave’s, in the meantime, will independently be able to mature its concept, build its brand and grow more profitably.

“We have great confidence as well in the on-going potential of our BWW franchise and the Buffalo Wild Wings brand. With the largest franchise in the United States, we see the benefit of our scale, the markets we serve, our successful track record as an operator and the competitive advantages of BWW being the first in its category and a leader in its segment. BWW is also making multiple enhancements in its value proposition, such as special value-based promotions and delivery service to drive sales growth. We expect to take full advantage of the brand’s long runway for growth.”

GUIDANCE:

Diversified Restaurant Holdings sees FY2016 revenue of $185-190 million, versus the consensus of $195.3 million.

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

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