AFC's 2nd-Q profits jump 29%

ATLANTA AFC Enterprises Inc., franchisor or operator of 1,878 Popeyes Chicken & Biscuits restaurants, posted a 29.4-percent increase in second-quarter profit on revenue that rose 11.3-percent to $38.3 million, mostly on the re-opening of corporate locations that had been battered by Hurricane Katrina in 2005.

AFC’s revenues also were helped by full-year sales from 13 formerly franchised restaurants that were acquired by the company in the second quarter of 2006. Popeyes systemwide domestic same-store sales for the latest quarter decreased 2.1 percent mainly because of lower traffic resulting from “continued pressures from value and boneless chicken offerings by competitors,” the company said.

For the quarter ended July 15, AFC posted net income of $6.6 million, or 22 cents per share, compared with year-earlier profit of $5.1 million, or 17 cents per share. The company’s bottom line was aided by lower general and administrative costs as well as continued gains from hurricane insurance recoveries.

Because of the “continued softness in same-store sales and the challenging business and competitive environment,” AFC said its full-year per-share earnings are expected to be at the lower end of its guidance of between 81 cents and 85 cents.

The company also revised downward its domestic same-store sales expectations for the full year to down 2 percent compared with previous guidance of flat to slightly negative results.