US fast food chain Del Taco Restaurants Inc. (NASDAQ:LEVYU) has dished up an increase in fourth quarter net profit as revenue rose and the company expanded its business.
The group, which serves American-style Mexican food, said net profit rose to $8.0mln in the 17 weeks to 3 January 2017 from $4.8mln in the 16 weeks to 29 December 2015.
Total revenue increased to $150.2mln from $133.4mln, driven by a 12.8% gain in restaurant sales and a 9.7% rise in franchise revenue.
Comparable restaurant sales rose 5.5%, marking the 13th consecutive quarter of growth.
Company-operated comparable restaurant sales rose for the 18th quarter in a row by 5.3%, while franchise comparable restaurant sales increased 5.8%.
Adjusted underlying earnings (EBITDA) climbed to $25.3mln from $21.2mln.
During the quarter, the company opened five company-operated and two franchised restaurants. It also bought five franchised restaurants in California.
In the first quarter of 2017, Del Taco sold two company-operated restaurants in San Diego.
“Our solid fourth quarter results capped another successful year at Del Taco as we exceeded our annual guidance for comparable restaurant sales, total revenue, restaurant contribution margin and adjusted EBITDA, and delivered on our expectations for diluted earnings per share,” said chief executive Paul Murphy.
The company reported full year revenue of $452.1mln, a 4.7% increase on a comparable 52-week basis, while net profit increased to $20.9mln from $4.8mln. Adjusted EBITDA increased to
For 2017, Del Taco has guided to revenue between $466mln and $476mln and adjusted EBITDA between $71.0mln and $73.5mln. It plans to open 23 to 26 new system-wide restaurants.
“Our development pipeline reinforces our path to mid-single-digit restaurant growth in 2017 and paves the way towards high-single-digit growth beyond 2018,” Murphy said.
Story by ProactiveInvestors