Fiesta Restaurant Group, parent company of the Pollo Tropical and Taco Cabana restaurant brands, reported comparable restaurant sales for the 13-week third quarter 2020, which ended on September 27. The company also provided a liquidity update.
Fiesta President and Chief Executive Officer Richard Stockinger says, “We are very encouraged by the continued improvement in comparable restaurant sales at both brands during the third quarter. Pollo Tropical’s comp sales acceleration was the most significant, improving from negative 31.6 percent in the second quarter to negative 11.1 percent in the third quarter, including sequential monthly comp momentum within the third quarter to negative 8.7 percent in September. Taco Cabana’s comp sales increased 500 basis points from the second quarter to negative 14.2 percent in the third quarter. The sales acceleration at both brands was realized despite our dining rooms being closed across most units for the majority of the quarter along with continued challenges in terms of COVID and economic conditions in Florida and Texas. In addition, we expect Pollo Tropical and Taco Cabana Adjusted EBITDA margins for the third quarter will be above the second quarter and year-ago period.”
Stockinger continues, “We have been taking ongoing steps to ensure a safe operating environment throughout this crisis. Effective July 12, we made the decision to close all of our dining rooms to ensure team member and guest safety, and recently began to evaluate re-opening dining rooms in select markets and locations. We continue to operate all of our restaurants for drive-thru, delivery and pickup, and we are accelerating efforts to better enable our customers to enjoy our brands safely and conveniently across all channels. We made very good progress during the third quarter on off-premise initiatives including the launch of curbside pickup capability at all units, the release of a greatly-enhanced online experience for each brand including easier to use apps, and expanded delivery options.”
Stockinger concludes, “Regarding liquidity, since July 31, 2020 we reduced our total debt by $14 million to $42 million and our net revolver debt by $21 million to $27 million as of September 27, 2020. The net revolver debt reduction was funded by cash flow from operations and the sale or sale-leaseback of four Company owned properties. We currently have offers or contracts in place for the sale or sale-leaseback of all 12 remaining Company owned properties being marketed, with additional transactions expected to close in the fourth quarter to enable further debt paydown, although there can be no assurance that such transactions will be completed during the fourth quarter or at all. We are also exploring the potential refinancing of our current credit agreement, although we cannot make any assurance of the timing or certainty of completing any refinancing transactions at this time.”
Fiscal months
July
Pollo Tropical: –13.8 percent
Taco Cabana: –14.4 percent
Fiscal August
Pollo Tropical: –10.8 percent
Taco Cabana: –14.1 percent
September
Pollo Tropical: –8.7 percent
Taco Cabana: –14.2 percent
Q3
Pollo Tropical: –11.1 percent
Taco Cabana: –14.2 percent
