AFC sees flat same-store sales in 2007
Shares of AFC Enterprises, Inc. (Nasdaq: AFCE), which franchises and operates Popeyes Chicken & Biscuits, are in negative territory following news the Atlanta-based company missed quarterly earnings projections and expects flat or declining 2007 same-store sales.
The net income for the first quarter of fiscal 2007 ended April 22 was $6.4 million, or $0.22 per share, compared with $0.19 per share for the first quarter of 2006, AFC Enterprises said after Thursday’s close. Four analysts polled by Thomson Financial were looking for earnings of $0.23 per share.
“Our first quarter earnings [were] slightly lower than what we had anticipated primarily due to softer same-store sales,” interim CEO Fred Beilstein said. “This sales performance was due to a decline in transactions resulting from overall competitive pressures in the marketplace in this challenging economic climate.”
Total domestic same-store sales decreased 3.4%, compared with an increase of 6.1% for the first quarter of 2006. Global same-store sales dropped 3.1%, compared with an increase of 5.1% in the first quarter of 2006. AFC Enterprises opened 29 new restaurants during the first three months of fiscal 2007, compared with 33 openings in the same period a year ago.
Sales from re-opened restaurants in New Orleans and new franchised restaurants helped lift system-wide sales 1.7%.
Total revenues were $51.0 million, a gain of 19.6%, or $8.4 million, compared with the first quarter of 2006.
Looking ahead, AFC Enterprises expects total domestic same-store sales for full year 2007 to be flat to slightly negative. A previously issued forecast called for a rise of between 1.5% and 2.5%. Same-store sales growth is expected to be slightly negative in the second quarter.
The company said it remains on track to open 165-175 restaurants this fiscal year.
At 1:30 p.m. ET shares had dropped $1.32, or 7%, to $18.15. The 52-week high is $21.10, established on May 8. The 52-week low of $12.11 was set on July 21, 2006.
