Carrols Restaurant Group posted a 7.3-percent increase in total revenue for the first quarter even as charges from a variety of expenses contributed to a net loss of $3.5 million for the company.
The Syracuse, N.Y.-based Burger King franchisee also said it completed the spin-off to stockholders May 7 of the Fiesta Restaurant Group Inc., which comprises the Pollo Tropical and Taco Cabana chains.
Total revenue for the company rose to $211.6 million in the quarter ended April 1, 2012, compared with $197.2 million in the year-ago period. Separately, Fiesta’s revenue increased 9.1 percent to $126.1 million in the quarter, up from $115.6 million in the first quarter of 2011.
Revenue for Carrols’ Burger King units rose 4.7 percent to $85.5 million for the quarter, versus $81.6 million in the 2011 period.
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Carrols posted a net loss for the period of $3.5 million, or 16 cents per share, compared with a profit of $2.2 million, or 10 cents per share, in the first quarter of 2011. The company took several charges against earnings, including impairment and other lease charges, and spin-off and acquisition-related expenses.
Same-store sales rose 5.9 percent at the company’s Burger King units, 9.4 percent at Pollo Tropical and 6.1 percent at Taco Cabana.
As of April 1, Carrols operated 297 Burger King locations, while Fiesta owned and operated 86 Pollo Tropical and 157 Taco Cabana restaurants. Fiesta franchises another 38 Pollo Tropical restaurants.
“During the first quarter, Burger King generated a solid 5.9-percent increase in comparable restaurant sales along with an improvement in restaurant-level profitability, said Dan Accordino, Carrols’ chief executive. “Burger King is undergoing a broad-based repositioning, including changes and enhancements to its existing products and menu, food preparation, brand image and marketing.
“These are transformational strategic initiatives focused on expanding the brand's reach to a more diverse consumer base, which we believe will contribute to continued improvements in the performance of both the Burger King system and Carrols,’” he said.
In March, Carrols agreed to acquire 278 company-owned Burger King outlets in an asset purchase agreement with Burger King Corp. Carrols said it would pay Burger King $15.8 million for the outlets. The deal will give the Miami-based franchisor a 28.9-percent stake in Carrols.
“With the Fiesta spin-off behind us, we are now solely focused on the considerable opportunities available to us within the Burger King system,” Accordino said. “We believe that our pending acquisition of 278 Burger King restaurants from Burger King Corp., and particularly the strategic nature of this transaction, will position the company for long-term growth.”
The transaction is expected to make Carrols the largest global franchisee of Burger King, with 575 units.
Contact Paul Frumkin at [email protected].