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Carrols: BK's $1 double cheeseburger set to spark sales

By Elissa Elan

SYRACUSE, N.Y. (Nov. 3, 2009) Carrols Restaurant Group Inc., one of Burger King’s largest franchisees, said this week that same-store sales at its BK units fell 6.1 percent for the third quarter, but that trends may improve following the debut of the chain’s new $1 double cheeseburger.

Last week, Burger King Holdings Inc., the chain’s franchisor, also posted negative same-store sales for its U.S. restaurants, and said that a renewed focus on value for the No. 2 burger brand could help spark sales. Burger King introduced the $1 sandwich in mid-October.

“The Burger King system is now shifting greater emphasis to the value side of its barbell menu with the recent launch of the Quarter Pound Double cheeseburger for $1, which we believe will improve customer traffic trends at our Burger King restaurants,” said Alan Vituli, Carrols chairman and chief executive.

For the quarter ended Sept. 27, Carrols’ net income increased to $5.6 million, or 26 cents per share, from $3.7 million, or 17 cents per share, in the same quarter last year. Latest-quarter revenue fell 3.8 percent to $201.2 million.

Carrols, which operates 314 Burger King restaurants, said revenue from the BK units fell 7.3 percent to $94.1 million. Third-quarter revenue from the company’s Hispanic fast-casual brands, including Pollo Tropical and Taco Cabana, fell to $107 million from $107.5 million a year ago.

Same-store sales fell 4.3 percent at Taco Cabana and 0.1 percent at Pollo Tropical.

“Under current economic conditions, building top-line momentum has been our greatest challenge, and we are working diligently to drive sales at all of our brands,” Vituli said. “We are focusing our media efforts for our Hispanic Brands, including television, radio and direct mail advertising, on our new products, limited-time offers and our value positioning to stimulate guest traffic.”

Looking ahead, the company said it expects current trends to continue for the rest of the year, and revenue is expected to remain flat from a year ago or increase 0.5 percent. Carrols said it planned to open between five and eight new Pollo Tropical or Taco Cabana stores and will close five Burger King restaurants.

Carrols operates 560 restaurants, including 314 Burger King units, 91 Pollo Tropical restaurants and 155 Taco Cabana locations.

Contact Elissa Elan at eelan@nrn.com.