Here’s a look at a handful of restaurant company earnings reports from this week, including Fatburger owner Fat Brands, Pizza Inn owner Rave Restaurant Group and El Pollo Loco owner, uh, El Pollo Loco.
Weather takes a toll on Fat Brands
Customers dined at chains like Fazoli’s and Johnny Rockets less often early this year because of bad weather.
That was at least according to parent company Fat Brands. Same-store sales at the company’s numerous brands declined 4% in the company’s first quarter. Fat Brands operates several chains, including Twin Peaks, Great American Cookies, Hot Dog on a Stick, Ponderosa, Bonanza and several other concepts.
Andy Wiederhorn, chairman of the Los Angeles-based company, blamed weather for part of the problem. “We started the year, like everyone else, in a really tough January,” he told analysts, according to a transcript on the financial services site AlphaSense. “Sales were off significantly because of the weather everywhere and they’ve been coming back period after period.”
But some brands are doing better than others. Fat Brands does not break out sales numbers by concept, but Wiederhorn said that steakhouse concepts Ponderosa and Bonanza are up 5% to 6%, which he credited to value customers. The snack brands are also “trending in a pretty good direction.”
“We’re encouraged that things are improving,” Wiederhorn said, “but it’s different where you are in the value spectrum of price.”
El Pollo Loco generated traffic growth in Liz Williams' first quarter as CEO. | Photo: Shutterstock.
Sales and profit growth at El Pollo Loco
El Pollo Loco reported first quarter systemwide same-store sales up 5.1%, including —a 2.6% increase in average check and a 1.2% increase in transactions —in what was new CEO Liz Williams’ first earnings call. Menu prices were up 6.7% for the quarter.
Total revenues grew 1.4% to $116.2 million, and net income was $5.9 million, compared with $4.9 million a year ago.
The second quarter, meanwhile, started strong with same-store sales up 5.3% quarter to date, which was attributed in part to the success of a double tostada promotion.
Williams said she has spent the past few months immersing herself in the business, working opening and closing shifts in restaurants, marinating chicken and working the drive-thru line, and that the brand has all the building blocks in place. “Overall, I believe we have a tremendous opportunity to take this beloved brand to another level,” she said.
The chain is on track to rollout kiosks to all company-owned restaurants by this summer, and El Pollo Loco is looking at adding new digital technology in drive-thrus to further automate ordering. Williams said the company is also looking to reduce the current $2.2 million buildout costs with a new design prototype in the works.
A rendering if a remodeled Pizza Inn. | Image courtesy of Pizza Inn.
Rave wants to remodel
Rave Restaurant Group, parent company of the Pizza Inn buffet chain and Pie Five fast-casual concept, continues to work on remodeling its stores, though it saw same-store sales dip during its third quarter.
For the quarter ended March 24, same-store sales at Pizza Inn decreased 1.9%, while comparable sales at Pie Five were down 6.4%. Net income of $700,000 rose from the $300,000 a year ago.
It was the Dallas-based company’s 16th consecutive quarter of profitability, CEO Brandon Solano said.
“We are steadfast in our commitment to continue expanding our reimaging and marketing programs,” Solano said. “As of the end of quarter three, we have 12 Pizza Inn restaurants set to begin the reimage process, in addition to the five sites that are already in progress or completed. This program embodies our determination to invest in our long-term success, as we expect to see double-digit same-store sales increases once completed.”
Rave ended the quarter with 104 Pizza Inn locations and 23 Pie Five stores in the U.S., as well as 21 international Pizza Inn restaurants.
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