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 first quarter ended March 25, 2014.
Key highlights from the first quarter 2014 compared to the first quarter 2013:
- Consolidated revenues increased 11.4 percent to $66.6 million from $59.8 million.
- On a calendar basis, comparable restaurant sales increased 5.1 percent at Del Frisco's Double Eagle and represented the concept's 17th consecutive quarter of positive comparable restaurant sales. On a fiscal quarter basis, which includes a one-week calendar shift in the comparison due to the 53rd week in fiscal 2013, sales in the same restaurants increased 5.5 percent.
- On a calendar basis, comparable restaurant sales decreased 2.1 percent at Sullivan's. On a fiscal quarter basis, which includes a one-week calendar shift in the comparison due to the 53rd week in fiscal 2013, sales in the same restaurants decreased 4.5 percent.
- Blended comparable restaurant sales, on a calendar basis, increased 1.6 percent across all three concepts.
- Cost of sales, as a percentage of consolidated revenues, decreased to 30.1 percent from 30.8 percent.
"We generated positive comparable restaurant sales on the strength of Del Frisco's Double Eagle, but weaker trends, although improving, at Sullivan's resulted in sales deleveraging and slower growth in restaurant-level profitability than revenues," says Mark S. Mednansky, CEO of Del Frisco's Restaurant Group, Inc.
"Of our three concepts, Sullivan's was most impacted by the calendar-shift that excluded New Year's Eve from the 12-week fiscal period, as well as lost operating days due to the unfortunate winter weather," he says. "However, when weather was not a factor, Sullivan's performance demonstrated to us that the menu, messaging, and facility enhancements implemented last year under the auspices of our new leadership structure are beginning to take hold."
Del Frisco's engaged an outside consulting firm, Tango Analytics, to conduct research on the domestic market potential of Del Frisco's Grille. The findings indicated the possibility of developing more than 170 Del Frisco's Grilles over time, across a diversity of settings, based on a minimum AUV of approximately $5.2 million.
"With 11 successful openings thus far, our dominant expansion vehicle clearly has a long runway of opportunity ahead of it, and we intend to bring this 'next generation' dining experience to markets across the country while upholding our strict development criteria," Mednansky says.
This year, the restaurant group will open five Grilles on both coasts, including one in Pasadena, California, and one in the capital.