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Del Taco 1Q same-store sales rise despite traffic decline

Brand has been evolving to offer more premium menu items

Del Taco Restaurants Inc. on Monday reported same-store sales growth of 3.2 percent in the first quarter ended March 22, despite lower traffic amid heavy quick-service price competition.

The increase marked the 10th straight quarter of same-store sales gains for the Lake Forest, Calif.-based quick-service Mexican chain. Traffic in the quarter fell 2.6 percent, while average check increased 5.4 percent.

“We achieved solid quarterly results, and are on track to deliver on our first year outlook,” Del Taco CEO Paul Murphy said in a statement. He noted that the same-store sales growth came despite “competitive discounting” and the chain’s 7.7-percent same-store sales growth in the same period a year ago.

“Our ability to operate effectively in this environment is a testament to the strength and resiliency of our brand our positioning and our menu strategy,” he said.

Revenues in the period increased 3.2 percent in the quarter, to $97.4 million, from $94.4 million the previous year. Net income increased to $3.1 million, from a loss of $4.9 million the prior year.

Del Taco has been evolving from a brand that focuses on low prices to one that offers more premium menu items. 

The company also has a lot of restaurants in California, where the minimum wage increase is expected to impact expenses by $7.2 million. Higher prices and increased menu mix have offset labor costs, Del Taco said. 

Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze

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