Analyst: AFC Enterprises Turning Around Popeyes

NEW YORK (AP) — Shares of AFC Enterprises Inc. advanced on Thursday after the Popeyes restaurant operator lifted its full-year profit outlook, despite a tough economy that has hurt demand for discretionary spending at restaurants.

Shares rose 62 cents, or 7.8 percent, to $8.60 in afternoon trading. The stock has ranged from $2.85 to $9.55 over the past year.

The company on Wednesday forecast fiscal 2009 earnings between 66 cents and 70 cents per share, up from a prior projection of 62 cents to 67 cents per share. Analysts polled by Thomson Reuters expected profit of 67 cents per share.

AFC also reported a lower second-quarter profit, as revenue for the three months ended July 12 fell 9 percent.

CL King & Associates analyst Michael W. Gallo, who rates the stock "Strong Buy," said the "very solid" second-quarter results show that the turnaround plan at Popeyes continues.

"Overall, we view this as an excellent quarter on many fronts, particularly given the very weak restaurant environment," he wrote in a client note.

Gallo raised his price target by $1 to $11.