ATLANTA AFC Enterprises Inc. reported a jump in fourth-quarter profit on cost cutting and improved sales at its Popeyes chicken chain.
The company posted net income of $4.0 million, or 16 cents per share, for the Dec. 27-ended fourth quarter, compared with profit of $2.4 million, or 10 cents per share, in the same quarter a year ago.
Revenue for the quarter fell 9.5 percent to $32.5 million from $35.9 million last year. Domestic systemwide same-store sales declined 1.0 percent, compared with a 2.8-percent decline in the year-ago quarter.
For the full year, AFC earned $18.8 million, or 74 cents per share, compared with $19.4 million, or 76 cents per share, in 2008. Revenue dropped 11.3 percent to $148 million, which the company attributed to the refranchising of 27 company-owned stores in the Atlanta and Nashville, Tenn., markets. Domestic same-store sales rose 0.6 percent in fiscal 2009, compared with a 2.2-percent decline in 2008.
AFC opened 95 restaurants and closed 81 others in 2009, exceeding its goal of up to 10 net openings. At the end of the year, the company operated or franchised 1,576 domestic restaurants and 367 international restaurants.
Cheryl Bachelder, AFC’s chief executive, attributed the company’s positive performance to a four-pronged strategic initiative: building the brand, running great restaurants, strengthening unit economics and ramping up new unit growth.
“We achieved this by staying true to our strategies despite a weak economy,” she said.
For the current fiscal year, AFC expects 10 to 30 net unit openings, with plans to add 110 to 130 new locations while shuttering up to 100 underperforming restaurants. The company also is planning new products to drive traffic as well as new tools and training to improve speed of service.
AFC projected global same-stores to range from negative 1.0 percent to growth of 2.0 percent in 2010. Earnings for the year are expected to range between 73 cents and 77 cents a share.
"As we continue to grow our market share, improve operations and restaurant unit economics, we will be well-positioned to accomplish the accelerated new unit growth of our long-term plan and deliver strong returns to our restaurant owners and shareholders,” Bachelder said.
Over the next five years, the company indicated it expects same-store-sales growth of 1 percent to 3 percent; new unit growth of 4 percent to 6 percent; and per-share earnings growth of between 13 percent and 15 percent.
Contact Elissa Elan at [email protected].
