Bravo Brio Restaurant Group, Inc., owner and operator of the BRAVO! Cucina Italiana and BRIO Tuscan Grille restaurant concepts, reported financial results for the 13- and 39-week periods ended Sept. 28, 2014, updated its outlook for 2014, and provided development guidance for 2015.
In the third quarter, revenues decreased 1.8 percent to $94.6 million from $96.3 million, while total comparable restaurant sales decreased 5.8 percent.
Comparable restaurant sales decreased 6.7 percent at BRAVO! and 5.2 percent at BRIO.
"Our performance during the third quarter fell short of our expectations and has caused us to revise our full year outlook for revenues and earnings," says Saed Mohseni, CEO. "The decline in comparable restaurant sales reflected an intense competitive promotional environment within casual dining, particularly in the Italian segment."
He says the dining environment is unlikely to change in the near term, and the company plans to limit discounting.
Restaurant-level operating profit decreased 21.7 percent to $11.6 million from $14.9 million. Net income was $1.1 million, or $06 per diluted share, compared to net income of $2.2 million, or $0.11 per diluted share.
"[Attributes that differentiate us] include, but are not limited to, our popular Light menu offerings, chef feature cards that reflect the creative talents of our executive chefs, sourcing more products from suppliers using sustainable agricultural methods, our new Eat/Repeat/Reward loyalty program, and the implementation of an on-line reservation system that will be completed in early 2015," Mohseni says.
Third Quarter 2014 Financial Results
Revenues decreased $1.7 million, or 1.8 percent, to $94.6 million in the third quarter of 2014, from $96.3 million in the third quarter of 2013. The decrease in revenues was primarily due to a comparable restaurant sales decrease of 5.8 percent that was only partially offset by an additional 41 operating weeks compared to the third quarter last year.
The comparable restaurant sales decrease consisted of a 6.4 percent decrease in guest counts partially offset by a 0.6 percent increase in average check.
Total restaurant operating costs, which include costs of sales, labor costs, operating costs and occupancy costs, increased $1.5 million, or 1.9 percent, to $82.9 million in the third quarter of 2014, from $81.4 million in the third quarter of 2013.
Total restaurant-level operating profit decreased $3.3 million, or 21.7 percent, to $11.6 million from $14.9 million in the same period last year. As a percentage of revenues, total restaurant-level operating profit decreased to 12.3 percent in the third quarter of 2014 from 15.4 percent in the third quarter of 2013.
Net income in the third quarter of 2014 was $1.1 million, or $06 per diluted share, compared to net income of $2.2 million, or $0.11 per diluted share, in the same period last year.
Third Quarter 2014 Brand Operating Highlights
Comparable restaurant sales decreased 6.7 percent at BRAVO! and 5.2 percent at BRIO. Average weekly sales for BRAVO! and BRIO were $58,400 and $76,900, respectively.
During the third quarter of 2014, one BRIO opened in Irvine, California. As of Sept. 28, 2014, the Company operated 47 BRAVO! restaurants, 59 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.
As follows, the company is updating its outlook for the 52-week period ending Dec. 28, 2014. This outlook excludes the potential impact of the expected modified "Dutch Auction" Tender Offer as well as the write-off of unamortized debt issuance costs from the prior facility.
- Total comparable restaurant sales of -5.4 percent to -5 percent (versus -5 percent to -4 percent previously).
- Revenues of $405 million to $408 million (versus $405 million to $410 million previously), reflecting lower estimated comparable sales.
- Development of six restaurants, three BRAVO! and three BRIO (versus four BRAVO! and two BRIO previously).
- Pre-opening costs of $3.5 million to $4 million.
- Capital expenditures of $22 million to $24 million.
The company is also providing preliminary guidance for the development of five restaurants in 2015.