SYRACUSE — Fiesta Restaurant Group, Inc. boosted profit by 8 percent in the second quarter, even as the company completed a long-planned spinoff from its former parent, Syracuse–based Carrols Restaurant Group, Inc.
Fiesta (NASDAQ: FRGI), which owns, operates, and franchises the Pollo Tropical and Taco Cabana restaurant brands, reported net income of $3.9 million, or 17 cents a share, in the second quarter ending July 1. That’s up from the same period a year ago, when Fiesta was still a subsidiary of Carrols (NASDAQ: TAST) and earned $3.6 million, or 16 cents per share.
Fiesta finished spinning off from Carrols, which is Burger King Corp.’s largest global franchisee, on May 7, 2012. The split, first announced in February 2011, hiked Fiesta’s general and administrative expenses in the second quarter of this year. Those expenses increased by $1.5 million to $10.5 million as Fiesta hired to fill its management team and took on spinoff expenses like legal costs.
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But Fiesta’s total revenue jumped to $128.8 million in the second quarter, up 6.3 percent from a year ago. Income from operations rose 25.6 percent to $12.9 million. Comparable restaurant sales spiked 7.8 percent at Pollo Tropical and 4.5 percent at Taco Cabana.
“Our second quarter marked strong top-line performance from both of our brands against strong prior-year sales comparisons, coupled with effective cost management that positively impacted our restaurant-level profitability,” Fiesta Restaurant Group President and CEO Tim Taft said in a news release. “We view our brands as well-positioned and differentiated in the competitive landscape and believe that through continued execution of our strategies, we can continue to build long-term value for our shareholders.”
Fiesta’s stock price was down $1.05, or 6.4 percent, to $15.31 as of 2:15 p.m. today. Still, the stock is up 22 percent from its opening price of $12.50 on April 26 when Fiesta shares started trading on their own.
Fiesta Restaurant Group owned 89 Pollo Tropical restaurants and 158 Taco Cabana restaurants as of July 1. It franchised 35 Pollo Tropical restaurants in the United States, Puerto Rico, the Bahamas, Costa Rica, Ecuador, Honduras, Panama, Trinidad and Tobago, and Venezuela. Additionally, it franchised five Taco Cabana restaurants in the United States.
The company’s executive offices are located at 968 James St. in Syracuse. Its Pollo Tropical division is headquartered in Miami, while its Taco Cabana division is based in San Antonio.
Fiesta’s earnings report comes a day after former parent Carrols, which is also headquartered at 968 James St. in Syracuse, reported losing $918,000, or 4 cents per share, in the second quarter ending July 1.
Contact Seltzer at rseltzer@cnybj.com
