Fiesta Restauran (NASDAQ: FRGI) reported Q2 EPS of $0.34, $0.06 worse than the analyst estimate of $0.40. Revenue for the quarter came in at $181.5 million versus the consensus estimate of $183.55 million.

Comparable restaurant sales at Pollo Tropical decreased 1.4% and comparable guest traffic decreased 2.6%, including the impact of sales cannibalization that negatively impacted comparable restaurant transaction growth by approximately 2.0%;
Comparable restaurant sales at Taco Cabana decreased 3.8% and comparable guest traffic decreased 5.5%, including the impact of weather that negatively impacted comparable restaurant transaction growth by approximately 1.0%;

Fiesta President and Chief Executive Officer Tim Taft commented, “Although we had a challenging first half to 2016 given industrywide softness, oil-related economic pressure affecting both brands in Texas, investment spending in new markets, and the negative impact of expected cannibalization, the second quarter was further pressured by severe rainstorms and flooding in Texas which hurt both sales and profitability.”

Taft added, “As we look to the second half of 2016, our mission is to strengthen our sales and margin trajectory through several initiatives as we navigate a challenging consumer environment. Effective media spending to further build brand awareness is already benefiting newer media markets such as San Antonio and Nashville and we are encouraged by early traction in Atlanta, where we launched media in June. We are also moving forward with accentuating our value proposition, testing our new loyalty platforms, implementing third party delivery in select markets, and enhancing our catering capabilities at both brands.”

Full Year 2016 Outlook

The Company will continue to provide a limited, updated set of operating targets for 2016 which do not include any impact or costs related to the potential separation transaction, including severance and relocation costs associated with transitioning our Pollo Tropical headquarters from Miami, Florida to Dallas, Texas. Based on current information, we are revising our projections for the full year 2016 for the following items:

• Comparable restaurant sales are now expected to be between -3% to -1% at Taco Cabana;
• Comparable restaurant sales are now expected to be between -1% and +1% at Pollo Tropical; and
• General and administrative expenses are now expected to be $54 to $57 million.

Previously communicated 2016 projections that remain unchanged include:

• Cost of sales improvement of approximately 100 basis points at Taco Cabana and approximately 180 basis points at Pollo Tropical, both as a percent of brand restaurant sales
• Depreciation and amortization of $36 to $38 million;
• An effective tax rate of 36% to 37%;
• Company-owned restaurant openings of 30 to 34 Pollo Tropical and up to four Taco Cabana restaurants; and
• Capital expenditures of $90 to $100 million.

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