Second Quarter Financial Performance Review
Global system-wide sales increased by 11.5%. System-wide sales were comprised of $497.6 million in franchise restaurant sales and $14.3 million in company-operated restaurant sales.
Global same-store sales increased 7.5% in the second quarter compared to a 0.7% increase in 2011, for a two-year growth of 8.2%. Total domestic same-store sales increased by 8.4%, rolling over a 0.5% increase last year. According to independent data, in the second quarter, Popeyes domestic same-store sales outpaced the Chicken QSR category for the 17 th consecutive quarter and the QSR category for the 3 rd consecutive quarter.
International same-store sales increased 0.9%, representing the 10 th consecutive quarter of positive same-store sales. Second quarter two-year international same-store sales growth was 3.2%.As a result of positive same store sales and new restaurant growth, Total Revenues were $39.6 million compared to $35.3 million last year. Company-operated restaurant operating profit (“ROP”) was $2.5 million at 17.5% of sales, compared to $2.0 million at 16.3% of sales last year. The increase in ROP margin was primarily due to an increase in same-store sales of 7.8% compared to a negative 0.2% in the second quarter of the prior year. The second quarter two-year same-store sales growth of Company-operated restaurants was 7.6%. Company-operated restaurant operating profit is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.” General and administrative expenses were $14.6 million at 2.9% of system-wide sales, compared to $13.6 million at 3.0% of system-wide sales last year. The $1.0 million increase was primarily attributable to a $0.8 million increase in short-term and long-term employee incentive costs and a $0.2 million increase in domestic franchise development expenses. Through the second quarter, Operating EBITDA was $28.6 million at 31.0% of Total Revenues, compared to $24.1 million at 29.4% of Total Revenues in 2011. The 160 basis point increase in Operating EBITDA was primarily due to strong same-store sales increases and ROP delivered by Company-operated restaurants. The Company’s Operating EBITDA margin remains among the highest in the QSR industry. Operating EBITDA is a supplemental non-GAAP measure of performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures.”
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