Aug 3 - Carrols Restaurant Group Inc reported a quarterly profit that handily beat Wall Street estimates, as the quick-service restaurant operator kept a tight lid on costs, and raised its 2009 profit outlook, lifting its shares as much as 9 percent in after-market trade.
For the year, the largest U.S. Burger King franchisee now sees earnings of 94 to 99 cents a share, up from its prior view of 90 to 95 cents a share.
However, the company -- which also owns and operates the Hispanic brand chains Pollo Tropical and Taco Cabana -- said it was taking a more cautious outlook to sales growth for the rest of the year. It expects revenue to increase 1 percent to 1.5 percent for the full year.
Second-quarter sales at Burger King were softer than expected, hurt by rising unemployment that led consumers to eat more meals at home and an increasingly competitive and promotional environment, the company said on a conference call with analysts.
"Burger King sales should improve later this year, driven by more successful product offerings than experienced in the second quarter, and as year-to-year comparisons become less challenging," a company executive said.
In the second quarter, same-store sales fell 4.7 percent at Burger King, 3.1 percent at Pollo Tropical and 3.8 percent at Taco Cabana.
Carrols said same-store sales at its primarily Florida-based Pollo Tropical restaurants are slightly positive so far in the third quarter. It expects the chicken-grill restaurant chain's sales to improve in the second half the year.
LOWER EXPENSES
Second-quarter net income more than doubled to $7.1 million, or 32 cents a share, from $3.3 million, or 15 cents a share, a year ago.
Sales fell 3 percent to $203.9 million.
Analysts on average were looking for a profit of 18 cents a share, before special items, on revenue of $207.7 million, according to Reuters Estimates.
The company paid down $14.8 million of debt in the quarter and expects total debt reduction of $30 million to $35 million for the year.
Carrols, which has cut employees' working hours, said advertising costs were lower in the second quarter due to a shift in the timing of advertisement expenses from the first half to second half of the year.
The company also benefited from lower costs for commodities and utilities. However, it expects a moderate increase in commodity costs for the rest of 2009.
Shares of the Syracuse, New York-based based company were trading up 68 cents at $7.90 after the bell. They closed at $7.22 Monday on Nasdaq.