Popeyes Louisiana Kitchen, Inc., the franchisor and operator of Popeyes restaurants, reported results for its fiscal third quarter of 2016, which ended October 2.
“We are pleased to report strong progress for the quarter,” says Cheryl Bachelder, Popeyes chief executive officer. “We generated global same store sales of 1.8 percent, opened 25 net new global restaurants and announced the refranchising of the Indianapolis company-operated market. We continue to expand our brand, which has led to the achievement of another record high market share of 26.9 percent. We are firmly on the path of achieving our long term bold growth goals and we are creating value for our franchisees and shareholders.”
Third Quarter 2016 Highlights
Total revenues increased 4.7 percent to $64 million, compared to $61.1 million in the third quarter of 2015. The $2.9 million increase in revenues was primarily due to a $2.6 million increase in franchise royalties, a $0.7 million increase in sales by Company-operated restaurants partially offset by a $0.4 million decrease in franchise fees. The increase in franchise royalties was driven by net unit growth and positive same store sales.
Total system-wide sales increased by 8.3 percent in the third quarter of 2016 compared to the same period last year as a result of net new unit growth and positive same-store sales performance.
Global same-store sales increased 1.8 percent in the third quarter of 2016 compared to a 6 percent increase in the third quarter of 2015, marking the 26th quarter of positive global same-store sales.
Total domestic same-store sales increased 1.5 percent, compared to a 5.6 percent increase in the third quarter of 2015. Popeyes increased its domestic market share of the chicken quick service category to a record high 26.9 percent, compared to 26 percent in the third quarter of 2015.
International same-store sales increased 3.7 percent, compared to a 9.1 percent increase in the third quarter of 2015, marking the 27th consecutive quarter of positive international same-store sales growth.
The Popeyes system opened 40 restaurants, which included 24 domestic and 16 international restaurants, compared to 47 total openings in the same period of last year. Net new restaurant openings were 25, compared to 39 net new restaurant openings in the same period last year.
As of the end of the third quarter, the company operated and franchised 2,631 restaurants, compared to 2,475 at the end of the third quarter in 2015, representing net new unit growth of 6.3 percent over the last 12 months.
Sales by company-operated restaurants were $26.1 million in the third quarter compared to $25.4 million in the same period last year. Company-operated restaurant operating profit was $5 million, or 19.2 percent of sales, compared to $4.9 million, or 19.3 percent of sales, in the same period last year. The increase in company-operated restaurant operating profit was primarily due to higher sales and lower chicken and grocery basket costs partially offset by higher labor costs.
