Fiesta Restaurant Group lowers 2013 sales guidance

Fiesta Restaurant Group Inc., parent to the Pollo Tropical brand, on Thursday joined a small chorus of restaurant companies reducing sales guidance for 2013, citing economic pressure.

The Addison, Texas-based Fiesta lowered its same-store sales forecast for Pollo Tropical revenue, advising that revenue at units open at least a year would rise 3 percent to 5 percent, down from the earlier guidance of a 5-percent to 6-percent increase.

“Based on recent events affecting the restaurant industry and the environment year to date,” Fiesta said in a statement, “the company is moderating its comparable restaurant sales growth expectations.”

Fiesta maintained its same-store sales forecast of an increase of 3 percent to 4 percent at its Taco Cabana brand.

Other restaurant companies have lowered guidance in the past month due to economic pressures.

Orlando, Fla.-based Darden Restaurants Inc. warned that blended same-store sales at its Red Lobster, Oliver Garden and LongHorn Steakhouse brands would decrease 1.5 percent to 2.5 percent. However, the company said same-store sales at its specialty concepts, including The Capital Grille, Eddie V’s and Seasons 52, were higher and would help Darden produce a systemwide sales increase of 6 percent to 7 percent for the fiscal year.

Brinker International Inc., Dallas-based parent to the Chili’s Grill & Bar and Maggiano’s Little Italy brands, in late February also revised its full-year guidance downward, saying same-store sales would rise 1 percent for the year, down from earlier guidance of a 2-percent to 3-percent increase. Executives said quarter-to-date same-store sales as of Feb. 24 had fallen 2.2 percent at Chili’s and were “essentially flat” at Maggiano’s.

While not revising guidance, Louisville, Ky.-based Yum! Brands Inc. said on Monday that same-store sales for its 5,400-unit system in China declined an estimated 20 percent in January and February. Sales in China in 2012 produced more than 40 percent of the operating profit for Yum, which owns and franchises the KFC, Pizza Hut and Taco Bell brands.

In general, the companies expect that estimated cost savings would offset the lowered sales expectations, and they kept revenue figures close to forecasts.

Tim Taft, Fiesta’s president and chief executive, said in a statement accompanying Thursday’s advisory that the company earnings-per-share growth forecast remained at 20 percent. “We believe this target is achievable,” Taft said, “driven by revenue growth related to new restaurant development, increasing comparable restaurant sales and franchise development, complemented by a focus on improving profitability.”

Fiesta also said a lower annual estimated tax rate and a better outlook for cost of sales from price increases would help company revenue in 2013.

Fiesta Restaurant Group has 251 company-owned restaurants and 43 franchised restaurants in the United States, Puerto Rico, the Bahamas, Costa Rica, Ecuador, Honduras, Panama, Trinidad & Tobago and Venezuela.

Contact Ron Ruggless at [email protected].
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