Restaurants maintain Q3 sales momentum

The majority of publicly traded restaurant companies continue to shake off a lackluster winter with decent sales growth in the third quarter, leading to robust profit gains at Texas Roadhouse and Red Robin. Quick-service chain Burger King also booked a healthy increase in third-quarter comparable sales, though charges related to its merger with Tim Hortons during the quarter swung the bottom line to a large net loss. 1851 Magazine compiled the following highlights of this week’s earnings reports so far. Burger King The Miami-based franchisor reported a net loss of $23.5 million, or negative 7 cents per diluted share, for the Sept. 30-ended third quarter, compared with a gain of $68.2 million, or 19 cents per diluted share, a year earlier. The company attributed that negative swing to charges related to the August transaction with Tim Hortons Inc., including a foreign-currency swap and two foreign-currency option contracts. Burger King recognized $141.8 million in operating expenses during the quarter due to the Tim Hortons merger. Revenue rose 1.4 percent to $278.9 million, reflecting a 2.4-percent increase in global same-store sales growth. The chain’s United States and Canada division reported a 3.6-percent same-store sales gain, while its Asia-Pacific system led all areas of the world with a 4.1-percent increase. Burger King’s Europe, Middle East and Africa division also booked a 1.3-percent gain, while Latin America and the Caribbean reported a 3-percent decrease in same-store sales. Texas Roadhouse Louisville, Kentucky-based Texas Roadhouse reported a 10-percent increase in net income for the Sept. 30-ended third quarter, with a profit of $18.88 million, or 27 cents per diluted share, compared with $17.17 million, or 24 cents per diluted share, a year earlier. Revenue rose 15 percent to $385.2 million during the period, reflecting same-store sales gains of 5.9 percent at company-owned restaurants and 5.2 percent at franchised locations. “We are pleased to report another quarter of strong top-line growth, highlighted by solid traffic growth of 4.4 percent,” chief executive Kent Taylor said in a statement. “While we were challenged by higher commodity cost inflation, we delivered solid diluted earnings per share growth this quarter. As we move into the fourth quarter, we are pleased with our sales momentum, and our development is on track.” The company forecasts positive sales growth and between 25 and 30 company-owned restaurant openings in 2015. Red Robin Gourmet Burgers Fellow casual-dining chain Red Robin Gourmet Burgers increased its third-quarter profit 54.6 percent to $7.21 million, or 50 cents per share, compared with $4.66 million, or 32 cents per diluted share, a year earlier. During the Oct. 5-ended period, the Greenwood Village, Colorado-based brand increased its revenue to $267.4 million, a 15.9-percent gain over a year earlier. The chain reported a 0.9-percent increase in same-store sales, as a 2.3-percent decrease in customer traffic was offset by a 3.2-percent increase in average check. Red Robin acquired 32 franchised restaurants during the quarter, giving it 402 company-owned units and 98 franchised units, as well as seven Red Robin Burger Works fast-casual restaurants.