SYRACUSE N.Y. Carrols Restaurant Group Inc., the largest Burger King franchisee, raised its 2008 profit guidance mainly because of easing commodity and utility costs, expense control and lower interest rates, the company said Monday. It also said fourth-quarter results would beat Wall Street estimates.
Carrols, which in addition to its 315 Burger King units also operates or franchises two Mexican concepts, Taco Cabana and Pollo Tropical, said it expected fourth-quarter earnings to range between 19 cents and 21 cents per share, above the 13 cents that Wall Street analysts had projected the company to post, and up from 16 cents earned last year.
Carrols raised its profit forecast for fiscal 2008, which ended Dec. 28, to between 58 cents and 60 cents a share, from a previous estimate of between 50 cents and 53 cents per share. In 2007, Carrols earned 78 cents per share. It will report full 2008 annual results in March.
“We were somewhat pleased with our performance, as we benefitted from effective cost management, which enabled us to exceed our bottom line expectations despite somewhat softer sales results,” said Alan Vituli, chairman and chief executive. “We also look forward to more favorable conditions when the broader environment improves.”
For the fourth quarter, revenues increased 1.8 percent to $200.8 million. Same-store sales increased 1.2 percent at the company’s Burger King stores and 0.5 percent at its Taco Cabana units, but decreased 3.6 percent at its Pollo Tropical restaurants.
Full-year revenues totaled $816.3 million, an increase of 3.4 percent from 2007. Annual same-store sales rose 3.5 percent at Burger King, were flat at Taco Cabana and fell 1 percent at Pollo Tropical.
Vituli said that Carrols would continue to focus on debt reduction. In the fourth quarter, the company reduced its balances by $48.2 million, from $361.5 million to $313.3 million.
“Because of the uncertain consumer environment, we are committed to reducing our financial leverage by lowering the outstanding debt on our balance sheet,” he said. “The objective of these actions has been to ensure that there is more than an adequate margin of safety with respect to the financial covenants in our senior credit facility and to provide investors with a greater degree of confidence in our ability over the long term to realize growth in shareholder value.”
The company currently operates 315 Burger King, 91 Pollo Tropical and 154 Taco Cabana restaurants.