Popeyes Louisiana Kitchen, Inc., the franchisor and operator of Popeyes® restaurants, has reported results for its fiscal first quarter of 2016, which ended April 17, 2016. The Company also reaffirmed earnings guidance for fiscal 2016.

"We are on track to deliver our 2016 full year guidance and we are confident in our future outlook as we make progress against our new, next generation Strategic Roadmap. We reported global same-store sales of 1.6% and earnings per diluted share of $0.58 during the first quarter, which was in line with our expectations. Despite the very promotional QSR landscape, our guests continue to value our quality food and innovative new product offerings and respond well to selective promotions of our core products," said Cheryl Bachelder, Popeyes Chief Executive Officer. "We are excited about our future as we begin executing our key strategies, which will help us to achieve our long term growth goals."

First Quarter 2016 Highlights

  • Total revenues increased 3.4% to $82.2 million, compared to $79.5 million in the first quarter of 2015.
  • Reported net income was $12.9 million, or $0.58 per diluted share, compared to $13.6 million, or $0.58 per diluted share in the first quarter 2015. Adjusted earnings per diluted share(1) were $0.58 in both the first quarter of 2016 and 2015.
  • System-wide sales increased 6.4%.
  • Global same-store sales increased 1.6%.
  • Total domestic same-store sales increased 1.1%, compared to a 7.1% increase in the first quarter of 2015, marking our 21st consecutive quarter of positive domestic same-store sales growth. Popeyes has increased its domestic market share of the chicken-QSR category to 26.3%, compared to 24.6% in the first quarter of 2015.
  • International same-store sales increased 6.2%, compared to a 6.1% increase in the first quarter of 2015, marking our 27th consecutive quarter of positive international same-store sales growth.
  • Sales by Company-operated restaurants were $34.6 million in the first quarter compared to $34.7 million last year. Company-operated restaurant operating profit(1) was $7.0 million, or 20.2% of sales, compared to $7.5 million, or 21.6% of sales in 2015. Lower sales and operating profit in new markets and higher labor costs were partially offset by favorable chicken and grocery basket costs.
  • Operating EBITDA(1) was $25.0 million, or 30.4% of total revenues, compared to $26.1 million, or 32.8% of total revenues in the first quarter of 2015. The decrease was primarily due to planned general and administrative investments to support new Strategic Roadmap initiatives.
  • Free cash flow(1) was $16.8 million, compared to $17.7 million in the first quarter of 2015.
  • The Popeyes system opened 44 restaurants, which included 19 domestic and 25 international restaurants. Net restaurant openings were 25.
  • As of the end of the first quarter, the Company operated and franchised 2,569 restaurants, compared to 2,420 at the end of the first quarter in 2015, representing net unit growth of 6.2% over the last twelve months.
  • The Company repurchased 554,086 shares of its common stock for approximately $30 million.

Fiscal 2016 Guidance
The Company is currently on track to deliver against its fiscal 2016 full year guidance and is confident in its future outlook:

  • System-wide same-store sales growth in the range of 2.0% to 3.0%.
  • New restaurant openings in the range of 200 to 235, including approximately 85 to 100 internationally and three to five new Company-operated restaurants.
  • Net new restaurant openings in the range of 140 to 185, for a net unit growth rate of approximately 6% to 7%.
  • General and administrative expenses to be approximately 2.9% to 3.0% of system-wide sales, maintaining an investment rate that supports long-term growth.
  • Capital expenditures to be in the range of $10 million to $15 million, including approximately $10 million for Company-operated restaurant development.
  • Earnings per diluted share and adjusted earnings per diluted share to be in the range of $2.10 to $2.15.
  • Share repurchases of $80 to $120 million in outstanding shares, compared to $62 million in 2015, with approximately $60 million purchased from operating cash flows and up to $60 million from additional borrowings.
  • Effective income tax rate in 2016 to be approximately 38%.

(1) Adjusted earnings per diluted share, operating EBITDA, Company-operated restaurant operating profit, and free cash flow are supplemental non-GAAP measures of performance. See the heading entitled "Management's Use of Non-GAAP Financial Measures."