Second Quarter 2013 Financial Results
The following summarizes the Company's results for the second quarter ended June 30, 2013 compared to the same quarter in the prior year:
- Total revenues increased 3.9% to over $1.0 billion versus the same quarter in 2012. This increase was primarily due to additional revenues from the opening of 45 new restaurants not included in the Company's comparable restaurant sales base and an increase in comparable restaurant sales at existing restaurants. The comparable restaurant sales increase was driven by increases in general menu prices and customer traffic, which were partially offset by mix in the Company's product sales. The increases in customer traffic resulted from selective daypart expansion across certain concepts, innovations in menu, service, promotions and operations across the portfolio and renovations at additional Outback Steakhouse locations. In addition, Total revenues were impacted by the closing of nine restaurants since June 30, 2012.
- Blended domestic comparable restaurant sales for Company-owned restaurants grew 2.0% for the Company's four core concepts. Results for Company-owned restaurants, by concept, were as follows:
|THREE MONTHS ENDED JUNE 30, 2013||COMPANY- OWNED|
|Domestic comparable restaurant sales (stores open 18 months or more)|
|Carrabba's Italian Grill||0.3%|
|Fleming's Prime Steakhouse and Wine Bar||3.8%|
- The number of weekdays and weekend days in a given reporting period can impact the Company's reported comparable restaurant sales. During the second quarter of 2013, the trading day impact on blended domestic comparable restaurant sales for Company-owned restaurants was (0.2)%. Exclusive of the trading day impact, the second quarter blended domestic comparable restaurant sales for Company-owned restaurants would have been approximately 2.2%.
- Restaurant level operating margins were 16.0% in the current quarter as compared to 15.7% in the second quarter of 2012, an increase of 30 basis points. This increase was primarily attributable to higher productivity savings, leveraging of average unit volumes and menu price increases. The increase was partially offset by higher kitchen and field management labor and bonus expenses, commodity inflation primarily associated with beef and increased operating supplies, utilities and repair and maintenance costs.
- Adjusted operating income as a percentage of Total revenues for the second quarter increased 150 basis points to 6.7% as compared to 5.2% in the second quarter of 2012. The increase was driven primarily by higher restaurant level operating margins and decreases in General and administrative expenses and the Provision for impaired assets and restaurant closings. The decrease in General and administrative expenses was mainly attributable to costs associated with the Company's annual managing partner conference which shifted from the second quarter in 2012 to the first quarter in 2013, lower management fees due to the termination of the management agreement in connection with the Company's initial public offering in 2012 and lower insurance expenses. These decreases were partially offset by additional stock-based compensation.
The Company reaffirmed guidance for the full-year that was previously communicated as part of the first quarter of 2013 earnings release. Included in that release was the Company's expectations for blended core domestic comparable restaurant sales growth to be at least 2.0% and Adjusted diluted earnings per pro forma share to be at least $1.10.