Bravo Brio Restaurant Group, Inc., owner and operator of the BRAVO! Cucina Italiana (BRAVO!) and BRIO Tuscan Grille (BRIO) restaurant concepts, reported financial results for the 13th- and 26-week periods ended June 26. The company also revised its outlook for the full year 2016.
Selected Second Quarter 2016 Highlights Compared to the Second Quarter 2015:
Revenues decreased 4.6 percent to $105.2 million from $110.2 million.
Total comparable restaurant sales decreased 7.1 percent.
Comparable restaurant sales decreased 8.4 percent at BRAVO! and 6.4 percent at BRIO.
Restaurant-level operating profit decreased 25.1 percent to $13.1 million from $17.5 million.
Brian O'Malley, president and chief executive officer, says, “2016 is a transitional year, beginning with the second quarter as we made investments in food quality, presentation, and service. These investments are designed to improve the guest experience and rebuild sales, traffic, and profitability. In late June, we completed our rollout of new menus that reaffirm our brands as culinary food-forward destinations by focusing on fresh ingredients, more grilled options, and greater customization. We also retrained the entire staff at each restaurant to ensure excellence in all elements of service and hospitality. While we have already seen an improvement in our satisfaction surveys, we have revised our annual outlook to reflect our recent performance and expectation that the investments made in the second quarter and the remainder of the year will provide significant long-term benefits that may not be fully realized in the current year.”
O’Malley continues, "We opened two BRAVO!s in the first quarter and we will open a BRIO in the fourth quarter in Torrance, California. We are continuing to evaluate our restaurant portfolio and have closed two BRAVO!s in the third quarter whose leases have expired. Our capital allocation priorities this year are centered on selective reinvestments in our private dining initiative and exploring reimaging options. On a year-to-date basis, we have repurchased $3.5 million shares and will continue to use our free cash to opportunistically repurchase shares and pay-down our outstanding debt.”
Second Quarter 2016 Financial Results
Revenues decreased $5 million, or 4.6 percent, to $105.2 million in the second quarter of 2016, from $110.2 million in the second quarter of 2015. The decrease in revenues was primarily due to a 7.1 percent decrease in comparable restaurant sale that was partially offset by a net additional 52 operating weeks. The comparable restaurant sales decrease consisted of a 5.7 percent decrease in guest counts and a 1.4 percent decrease in average check.
Total restaurant operating costs, which include costs of sales, labor costs, operating costs and occupancy costs, decreased $0.6 million, or 0.7 percent, to $92.1 million in the second quarter of 2016, from $92.7 million in the second quarter of 2015. Total restaurant-level operating profit decreased $4.4 million, or 25.1 percent, to $13.1 million from $17.5 million in the same period last year. As a percentage of revenues, total restaurant-level operating profit decreased to 12.5 percent in the second quarter of 2016 from 15.9 percent in the second quarter of 2015. Restaurant level margins were negatively impacted by approximately 100 basis points due to costs associated with the new menu rollouts and retraining initiatives.
Second Quarter 2016 Brand Operating Highlights
Comparable restaurant sales decreased 8.4 percent at BRAVO! and 6.4 percent at BRIO. Average weekly sales for BRAVO! and BRIO were $57,900 and $78,700, respectively.
During the first quarter of 2016, the company opened BRAVO restaurants in Grand Rapids, Michigan, and Beavercreek, Ohio. As of June 26, the company operated 53 BRAVO! restaurants, 64 BRIO restaurants, and one Bon Vie restaurant across 33 states. Included in this total is one BRIO restaurant that is operated under a management agreement. Additionally, one BRIO restaurant is operated under a franchise agreement.
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