Fiesta Restaurant Group Inc. is emphasizing growth of its Caribbean-style Pollo Tropical brand and will be debuting a new prototype in early 2014, the company said Thursday.
Tim Taft, Fiesta’s president and chief executive, said the company continues to view Pollo Tropical as its “primary expansion vehicle for the foreseeable future,” noting that in 2013, 12 of the planned 18 new company-owned restaurants will be Pollo Tropical units. He added that the company intends to backfill Pollo Tropical units in Florida, increase penetration in Georgia and Tennessee, and make its debut in the Texas market.
A new Pollo Tropical prototype will open in the Dallas market in early 2014, and the company has worked on engineering the new units to be less expensive to build. “We’ve been able to eliminate about $160,000 out of costs, which in round numbers is between 12 and 15 percent,” he said in an analyst call Thursday. “I think that’s a big bite out of what we’ve done thus far.”
Addison, Texas-based Fiesta, which also owns the Taco Cabana brand, said its two fast-casual concepts produced a 26.7-percent increase in net income for the June 30-ended second quarter. The company reported net income of $5 million, or 21 cents per share, compared with $3.9 million, or 17 cents per share, in the same period last year.
Revenue rose 9.4 percent to $140.9 million compared to $128.8 million in the prior-year period, and same-store sales increased 6.4 percent at Pollo Tropical and 1.1 percent at Taco Cabana.
Raymond James & Associates kept its “strong buy” rating on Fiesta and said in a note, “Even in a slowing restaurant demand environment, we believe Fiesta can continue to produce per-store sales and cash flow of that among the best in the industry.”
During the second quarter, Fiesta opened four new company-owned Pollo Tropical restaurants in Gainesville, Melbourne, and Pompano Beach, Fla., and Kennesaw, Ga. It opened three new company-owned Taco Cabana restaurants in Texas, including two in Dallas and one in Waxahachie. The company opened international franchised Pollo Tropical restaurants in Costa Rica, India and Panama.
As of June 30, Fiesta owned and operated 96 Pollo Tropical restaurants and 164 Taco Cabana restaurants. It franchised 38 Pollo Tropical restaurants in the United States, Puerto Rico, the Bahamas, Costa Rica, Ecuador, Honduras, India, Panama, Trinidad and Tobago, and Venezuela, as well as eight Taco Cabana restaurants in the United States.
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