Comparable Restaurant Sales Decrease at Del Frisco’s Restaurant Group

 

Del Frisco’s Restaurant Group, Inc., the owner and operator of the Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse, and Del Frisco’s Grille restaurant concepts, reported financial results for the third quarter ended September 6. The company also revised its outlook for the 2016 fiscal year and provided development guidance for the 2017 fiscal year.

Key highlights from the third quarter 2016 compared to the third quarter 2015 include:

Consolidated revenues increased 4 percent to $71.4 million from $68.6 million.

Revenues at Del Frisco’s Grille increased 20.9 percent to $24.1 million from $19.9 million.

Total comparable restaurant sales decreased 3 percent.

Comparable restaurant sales decreased 3.7 percent at Del Frisco’s Double Eagle Steak House comprised of a 3.1 percent increase in average check and 6.8 percent decrease in customer counts.

Comparable restaurant sales decreased 3.2 percent at Sullivan’s Steakhouse comprised of a 0.4 percent increase in average check and 3.6 percent decrease in customer counts.

Comparable restaurant sales decreased 1.4 percent at Del Frisco’s Grille comprised of a 0.3 percent increase in average check and 1.7 percent decrease in customer counts.

Comparable restaurant sales decreased 3.7 percent at Del Frisco’s Double Eagle Steak House comprised of a 3.1 percent increase in average check and 6.8 percent decrease in customer counts.

Comparable restaurant sales decreased 3.2 percent at Sullivan’s Steakhouse comprised of a 0.4% increase in average check and 3.6 percent decrease in customer counts.

Comparable restaurant sales decreased 1.4 percent at Del Frisco’s Grille comprised of a 0.3% increase in average check and 1.7 percent decrease in customer counts.

Cost of sales, as a percentage of consolidated revenues, improved to 28.3 percent from 29 percent.

Mark S. Mednansky, chief executive officer of Del Frisco's Restaurant Group, Inc., says, "Sales choppiness during our seasonally weak third quarter yielded results that fell short of our expectations and have caused us to revise our annual guidance. In addition to continued weakness at our locations most impacted by the continued downturn in the energy sector, we saw weakness at several East Coast locations from reduced tourism spending, specifically from the fallout over the British pound devaluation. Despite the sales challenges, we were pleased to see an improving trend at Del Frisco’s Grille that resulted in positive comparative restaurant sales late in the quarter, and we are encouraged by early momentum in the fourth quarter as both Del Frisco’s Double Eagle and the Grille have generated positive comparable restaurant sales through the first five weeks of this important 16-week period. We are working hard to ensure that these trends continue, and we are focused on delivering our brand commitment every day to each and every guest across each day part, but we must remain cautious in view of the current challenges affecting our industry.”

Mednansky continues, “The operational improvements we have made at Del Frisco’s Grille during this transitional year have boosted our team’s morale and are yielding higher guest satisfaction scores across several criteria, including food quality, pace of dining, and willingness to recommend. Our pending Grille menu launch will build and sustain these efforts as it will further showcase the brand as an everyday affordable, upscale dining and drinking destination.”

Mednansky concludes, "The new Del Frisco's Grille in Huntington, Long Island, and relocated Del Frisco’s Double Eagle in Uptown Dallas are both off to resounding starts, welcoming new guests to our brands as well as loyal patrons who have enjoyed Del Frisco’s dining experiences at other locations.  In the fourth quarter, we will be opening two Del Frisco’s Grille locations in and around Nashville, Tennessee. The first opening is in The Gulch—a vibrant trade area between Music Row and Downtown—and the second will be in the affluent suburban community of Brentwood, a location that was originally scheduled for early 2017.  We have signed leases for a Del Frisco’s Double Eagle in Plano, Texas, and a Del Frisco’s Grille in downtown New York City, both of which are scheduled to open late spring 2017, and a Del Frisco’s Grille in Westwood, MA that will open in either late 2017 or early 2018, depending upon the landlord delivery timeframe.  We are also in various stages of negotiations on multiple additional outstanding sites.  Each of these upcoming Del Frisco’s Grille openings contain elements of ‘the Grille of the future’ which is based upon a more scalable, more efficient, and more cost-effective prototype.”

Review of Third Quarter 2016 Operating Results

Consolidated revenues increased $2.8 million, or 4 percent, to $71.4 million in the third quarter of 2016 from $68.6 million in the third quarter of 2015. Total net operating weeks increased to 608 from 571. Total comparable restaurant sales decreased 3 percent in the third quarter of 2016 following a total comparable restaurant sales decrease of 1.2 percent in the third quarter of 2015.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.

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