Del Taco (TACO) reported earnings on Thur 19 Oct 2017 (a/h)

** charts after earnings **

  

** monthly **

Del Taco reports EPS in-line, revs in-line; System-wide and Co-operated comparable restaurant sales growth of 4.1% and 3.7%; lowers FY17 EPS below consensus, narrows revs in-line

• Reports Q3 (Sep) earnings of $0.13 per share, in-line with the Capital IQ Consensus of $0.13; revenues rose 6.3% year/year to $110.99 mln vs the $110.46 mln Capital IQ Consensus.
  • System-wide and Company-operated comparable restaurant sales growth of 4.1% and 3.7%. 
    • Company-operated comparable restaurant sales growth was comprised of average check growth of 4.0%, including approximately 1.5% of menu mix growth, partially offset by a transaction decline of 0.3%.
  • The opening of two company-operated and two franchise restaurants.
• Co issues guidance for FY17, sees EPS of $0.52-$0.54 (prior: $0.52-0.55) vs. $0.56 Capital IQ Consensus Estimate; sees FY17 revs of $472-$475 mln (prior: $470-476 mln) vs. $472.65 mln Capital IQ Consensus Estimate.
  • Adjusted EBITDA between $71.5 million and $72.5 million (previously $71.5 and $73.5). 
  • Restaurant contribution margin between 19.5% and 19.8% (was 19.8% to 20.3%).
  • General and administrative expenses of between approximately 8.1% and 8.3% of total revenue (previously 8.2% and 8.4%).
  • Effective tax rate of approximately 39.0% (previously 40.0%).
  • Reaffirms net capital expenditures totaling approximately $43.0 million to $46.0 million. 
• John D. Cappasola, Jr., President and Chief Executive Officer of Del Taco, commented, "During the third quarter, our company-operated and franchised restaurants both extended their track records of positive comparable restaurant sales, and The Del Taco system as a whole achieved 10.8% growth in comparable restaurant sales on a two-year stacked basis. We successfully executed our strategy to lap last year's accelerated performance by combining comprehensive improvement across the brand with an impactful marketing plan. We raised the bar in operations by focusing on improving our Overall Satisfaction Scores and Lunch and Dinner Speed compared to last year, embedding awareness and usage of The Del Taco and Platos, and reintroducing Carnitas as a limited time offer. We finished the quarter with our launch of Queso, a highly relevant and elevated QSR+ ingredient that is currently mixing at approximately 7% of sales and will enable exciting future product innovation across our menu."