Del Taco Restaurants Inc., the second largest Mexican-American quick-serve chain by units in the U.S., operating restaurants under the name Del Taco, announced its fiscal second quarter 2016 financial results.
The fiscal second quarter 2016 highlights include:
· System-wide comparable restaurant sales growth of 3.3 percent and company-owned comparable restaurant sales growth of 3.1 percent, marking the eleventh and sixteenth consecutive quarter of gains, respectively
· Company-owned comparable restaurant sales growth comprised average check growth of 4.9 percent, including nearly 1 percent of menu mix growth, and a transaction decrease of 1.8 percent
· Total revenue of $100 million, representing 2.5 percent growth from the fiscal second quarter of 2015
· Restaurant sales of $95.9 million, representing 2.1 percent growth from the fiscal second quarter of 2015
· Restaurant contribution margin, a non-GAAP financial measure, of 20.6 percent, an improvement of approximately 80 basis points from the fiscal second quarter of 2015
· Net income increased to $4.9 million, representing diluted earnings per share of $0.13, from $4.6 million in the fiscal second quarter of 2015
· Adjusted EBITDA, a non-GAAP financial measure, increased to $16.0 million from $15.3 million in the fiscal second quarter of 2015, representing 4.5 percent growth
· The opening of one company-owned restaurant
“Effective execution resulted in solid second quarter performance that was in line with our expectations and characterized by system-wide comparable restaurant sales growth, restaurant contribution margin expansion, and increases in both adjusted EBITDA and net income,” says Paul J.B. Murphy, III, president and CEO of Del Taco.
“Del Taco’s brand equity and unique barbell menu strategy supported favorable menu mix shifts driven by premium category use while our expanded Buck & Under platform provided guests compelling every day value without discounting,” Murphy says. “At company restaurants, effective menu price increases and favorable menu mix combined with modest commodity deflation helped offset the California minimum wage increase to $10 per hour and led to meaningful restaurant contribution margin expansion.
“In late June, we launched Fresh Combined Solutions, the next phase of our Combined Solutions strategy. The goal is to build upon our successful repositioning by putting a finer point on our brand positioning to further differentiate Del Taco. In addition to a number of operational enhancement initiatives designed to drive quality, speed, and service, we launched several brand catalysts to drive demand. We are delighted with how 2016 is shaping up for our business, confident that we can achieve our annual guidance, and are excited by what we have yet to accomplish this fiscal year.”