SYRACUSE, N.Y. — Carrols Restaurant Group, Inc. (NASDAQ: TAST), the largest Burger King franchisee in the U.S., has reported a net loss of more than $22 million, or 44 cents a share, in the first quarter of 2020 as the coronavirus pandemic hurt its business.
The loss was worse than the net loss of more than $11 million, or 32 cents, that Carrols reported in the same quarter in 2019.
Carrols also announced an adjusted net loss of $19.3 million, or 38 cents a share, in the first quarter, compared to an adjusted net loss of $10.2 million, or 28 cents, in the prior-year period.
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The Syracuse–based company noted acquisition and integration costs of $2.7 million for the three months ended March 31. The costs included legal and professional fees incurred in connection with the acquisition of 165 Burger King and 55 Popeyes restaurants from Cambridge Holdings, LLC, which were included in general and administrative expense.
Comparable restaurant sales for the company’s Burger King restaurants decreased 5.7 percent in the quarter compared to a 2.4 percent increase in the prior-year quarter. During the last month of the first quarter, when the COVID-19 crisis hit hard, comparable Burger King restaurant sales decreased 16.8 percent, Carrols said.
“While we began 2020 with renewed optimism, we and our fellow citizens were faced with a whole new set of challenges beginning in March due to COVID-19,” Daniel Accordino, chairman and CEO of Carrols, said in the earnings report. “We immediately took the necessary steps to ensure the safety and well-being of our employees and guests and then quickly and efficiently pivoted our business operations and improved our financial liquidity.”
Carrols said it is “encouraged” that its weekly trend for comparable restaurant sales has begun to “stabilize and improve” over the past few weeks and is hopeful that conditions will “further strengthen” as businesses begin to reopen and society returns to a “modified state of normalcy,” said Accordino.
“Still, we cannot predict what the near-term future holds with any certainty and when, or the manner in which, the conditions surrounding the COVID-19 pandemic will change, but we will be ready to make additional adjustments to our business as needed. Accordingly, we have withdrawn our full year 2020 guidance as it can no longer be relied upon,” the Carrols CEO added.
Carrols is one of the largest restaurant franchisees in the U.S. and currently operates 1,095 restaurants. The firm currently operates 1,030 Burger King restaurants. It also runs 65 Popeyes eateries. Carrols has operated Burger King restaurants since 1976.
