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AFC raises 2012 growth guidance after strong 3Q

The Popeyes parent reported increases in same-store sales and revenue for the period

Buoyed by increases in same-store sales and revenue in the third quarter, AFC Enterprises Inc. raised its growth guidance for fiscal 2012 and reiterated confidence in its long-term plans to build its system domestically and internationally.

For its Sept. 30-ended third quarter, the operator and franchisor of the 2,060-unit Popeyes Louisiana Kitchen brand increased its net income 19 percent to $6.9 million, or 29 cents per share, compared with $5.8 million, or 24 cents per share, a year earlier.

Revenue rose 9.9 percent to $38.9 million compared with the third quarter of 2011, reflecting a net gain of 62 stores open from a year earlier and an increase in global same-store sales of 6.3 percent during the period.

Same-store sales rose 6.8 percent in the United States, comprising gains of 1.9 percent in company-operated locations and 7 percent at franchised restaurants. International restaurants grew their same-store sales 2.5 percent.

Atlanta-based AFC’s chief executive, Cheryl Bachelder, said in a statement that the company “delivered another solid quarter.”

“With strong advertising and our distinctive Louisiana food, we are successfully driving traffic into our restaurants and winning market share from the broader QSR category,” she said. “We are ideally poised for accelerated restaurant growth, both from existing franchisees that are experiencing record profitability and new franchisees that recognize the brand’s success.”

The company also raised its guidance for fiscal 2012 in several measures. It bumped up its earnings per share guidance 2 cents to a range between $1.19 and $1.21, which would represent a 20-percent increase over fiscal 2011’s earnings of 99 cents per share.

AFC now projects to grow global same-store sales for the year to a range between 6 percent and 6.5 percent, up from its original 5-percent to 6-percent target and compared with 3.1 percent in fiscal 2011. AFC also narrowed its range of net new-unit growth for the year to 65 to 85 locations, from a previous goal between 60 and 90 units. The company had 65 net openings in fiscal 2011.

AFC cited independent data that reported Popeyes’ same-store sales growth outpaced that for the chicken segment for the 18th consecutive quarter and for the entire quick-service industry for the fourth straight quarter.

AFC operates 40 company-owned stores and franchises another 1,606 locations in the United States, and it has 414 franchised restaurants in nearly 30 international markets.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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