WEB NEWS Comments & Business Outlook
First Quarter 2013 Results
System-wide sales grew 17.0% in the first quarter to R$ 297,5 million , driven by an increase in the number of franchised points of sale.
Net income attributable to Brazil Fast Food Corp. in the first quarter of 2013 was R$ 6.7 million, or R$ 0.83 per basic and diluted share, as compared to R$ 3.4 million, or R$ 0.42 per basic and diluted share in the year-ago quarter.
“In the first quarter of 2013, we experienced solid revenue growth and a substantial increase in profitability. This growth primarily derived from higher revenues from own-operated stores, particularly at our Pizza Hut and KFC restaurants. Same-store sales followed the same trend, where we experienced solid increases among our KFC and Pizza Hut brands,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.
“Same-store sales were slightly lower at our Bob’s restaurants due to a long period of inclement weather and a more competitive business environment; however this was partially offset by an increase in the number of franchised points of sale. Same-store sales at our KFC restaurants benefited from actions we took to boost evening and afternoon sales in addition to an increase in points of sale, and Pizza Hut sales responded well to radio and Internet promotions, the introduction of a new take-out system at selected restaurants, and the number of Pizza Hut points of sale increased as well.”
Business Outlook
In 2013, the Company will continue to implement its multi-brand strategy and plans to add 150 points of sale in its system, of which 75 will be kiosks, despite a more aggressive competitive landscape including international brands.
“We continue to strengthen our balance sheet to support our future expansion,” said Mr. Bomeny.
“We continue to add new stores to increase the market penetration of our Bob’s brand, especially in the interior of Brazil, while enhancing brand awareness and continuously improving operations. While we are continuing our work with Yum! Restaurants International, we are now focusing on increasing the profitability of our own KFC and Pizza Hut stores in Rio de Janeiro and São Paulo metropolitan areas. For Doggis, we are also exploring new store formats and distribution channels to improve penetration of the brand throughout Brazil. In our Yoggi brand stores, we have had good success implementing a self-service concept for our Yoggi brand stores and we look forward to developing a stronger presence in the frozen yogurt segment,” Mr. Bomeny concluded.
GeoSpecial Notes
On 3/23/2011 we added BOBS to the GeoSpecial list @ $11.35
Catalyst : Strong fourth quarter 2010 results were the company commented that they expect to benefit from spending associalted with the infrastructure build-out to support the World Cup and the Olympics which will be hosted in Brazil in 2014 and 2016 respectively.
We are now removing BOBS from the GeoSpeicial List @ $9.00
Current road block : Earnings growth has stalled out, and the company gives no visibility. The lack of investor relations and failure to issue press releases makes it extremely hard to invest with confiedence. We will revisit in 2014.
Peak performance: Reached a high of $13 .25 on 08 /19 /2011 for a maiximum potential return of 17%
Current Price : $9.00
Comments & Business Outlook
First Quarter 2012 Results
System-wide sales totaled R$254.2 million, up 15.0% from the first quarter 2011
Revenue totaled R$60.5 million, up 10.2% from the first quarter 2011
Points of sale totaled 891 at March 31, 2012, up from 781 at the end of first quarter 2011
EBITDA was R$7.1 million, up 7.3% from the first quarter 2011
Operating income increased 13.8% year-over-year to R$5.5 million
Net income was R$3.4 million, or R$0.42 per basic and diluted share
“We began fiscal 2012 on a positive note as our revenue increased over 10% year-over-year and we continued to expand our market presence to a record 891 points of sale. Additionally, the decline in the number of Bob’s, KFC and Doggis’s point of sales reflects our strategy to limit direct operations to our most profitable outlets and to focus on growing our franchise network,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.
Business Outlook
Brazil Fast Food completed the acquisition of Yoggi, a frozen yogurt brand in Brazil on May 17, 2012, to expand its product portfolio in the food service industry. Yoggi was founded in 2008 and now has a total of 60 points of sale in Brazil operated by franchisees across the country. Brazil Fast Food expects to increase the total number of points of sale to 150 over the next five years.
“With the acquisition of Yoggi, we have now expanded our product offerings and improved our ability to cater to our customers taste and preferences. We are seeing an increasing level of consumer interest in frozen yogurt and expect this trend to continue. In 2012, we are focusing our efforts on enhancing our customer service and increasing guest counts and sales at our KFC stores by promoting KFC’s Buckets at dinner party and weekends. We also plan to enhance our own-operated Pizza Hut stores results, consolidate 'Pizza Hut Express with PHD platform' and expand our Pizza Hut stores. At the end of 2012, we expect Bobs’ brand to reach a total of 1000 points of sale, a 20.5% increase from 2011,” concluded Mr. Bomeny.
Comments & Business Outlook
Third Quarter 2011 Results
System-wide sales totaled R$236.8 million , up 20.6% from the third quarter 2010
Revenue totaled R$60.4 million, up 14.9% from the third quarter 2010
Points of sale totaled 846 at September 30, 2011, up from 742 at the end of third quarter 2010
EBITDA was R$7.0million , down 36.9% from the third quarter 2010
Operating income was R$5.5 million , down 41.8% from the third quarter 2010
Net income was a loss of R$-0.54 million , or R$-0.07 per basic and diluted share, as compared to net income of R$5.3 million , R$0.65 in the third quarter 2010
Non GAAP EPS of $0.34 vs ($0.04)
“We are pleased to report a quarter of double-digit top-line growth driven by the expansion of our Bob’s branded franchise base and solid same-store sales performance and operating efficiencies at our company-owned stores. Year-over-year operating income comparisons reflect the non-recurring gain of R$6 million in Q3 2010 due to the disposition of certain properties and fixed assets. The net loss in the third quarter of 2011 is primarily due to a R$5.6 million non-cash charge resulting from a balance sheet adjustment to our provision for tax loss carry-forwards. We are pleased with the progress of our discussions with the tax authorities and are optimistic we will be able to favorably resolve the R$6.7 in contingent tax liabilities once the facts are carefully reviewed,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.
“We believe that the very positive trends in revenues and operating income for the first nine months of 2011 confirm that our business is healthy and on track. We are also pleased to note that our strong operating cash flow enabled us to continue to pay down our debt and strengthen our financial position.”
Business Outlook
“During the first nine months of 2011, we made solid progress in expanding our higher margin franchise operations, while focusing our company-owned stores on the most profitable outlets and improving the efficiency of operations. Same store sales at our owned restaurants improved by 8.7% for Bob’s, 3.7% for KFC, and 7.8% for Pizza Hut during the nine-month period. Net franchise revenues grew by 22.8% during this period, with franchise operating margins improving to 64.9%, as compared to 57.6% in the first nine months of 2010," said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. "We see a continuation of the current favorable business environment in 2011 and expect to benefit from, among other factors, increased spending associated with the build-out to support the World Cup and Olympics to be hosted in 2014 and 2016, respectively," concluded Mr. Bomeny.
Comments & Business Outlook
First Quarter 2011 Highlights
System-wide sales totaled R$221, million, up 15.3% from the first quarter 2010
Revenue totaled R$54.9 million, up 9.7% from the first quarter 2010
Points of sale totaled 781 at March 31, 2011, up from 737 at the end of first quarter 2010
EBITDA was R$6.6 million, up 43.4% from the first quarter 2010
Operating income was R$4.9 million, up 113.1% from the first quarter 2010
Net income was R$4.2 million, or R$0.52 per basic and diluted share, up 125.0% from the first quarter 2010
“We are very pleased to report strong first quarter results, highlighted by meaningful operating margin improvement and robust net income growth. Our solid start in 2011 reflects our strategy to focus on our most profitable company-owned stores while growing our industry leading brands through new franchise relationships in favorable locations throughout Brazil,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. “The outlook for our business for the rest of the year remains positive and we will continue to invest in our brands in the quarters ahead.”
Business Outlook
“Our primary goal in 2011 is to profitably grow and strategically position our leading brands in Brazil, while continuing to improve the efficiency and effectiveness of our existing operations. We also will continue to evaluate the acquisition or development of new brands opportunistically," said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. "We see a continuation of the current favorable business environment in 2011 and expect to benefit from, among other factors, increased spending associated with the build-out to support the World Cup and Olympics to be hosted in 2014 and 2016, respectively," concluded Mr. Bomeny.
Comments & Business Outlook
Fourth Quarter 2010 results :
System-wide sales grew 12.5% in the fourth quarter to R$ 234.5 million , driven by an increase in the number of franchised points of sale as well as higher sales from company-owned stores.
Total revenue for the fourth quarter 2010 increased by 7.8% to R$56.2 million compared to R$52.2 million in the fourth quarter 2009.
Revenue growth was primarily driven by the continued expansion of Brazil Fast Food’s franchisee network as well as gains from economies of scale and the associated increase in the Company’s purchasing power.
The small increase in revenue during this quarter was primarily due to the reduction in the number of stores the Company owns and operates to 77 compared to 86 in the same period of last year, which was offset by higher same store sales, and by strong contribution from the Company’s Pizza Hut brand.
EBITDA in the fourth quarter of 2010 was R$8.1 million , compared to R$7.6 million in the fourth quarter of 2009. EBITDA margin was 14.4% in the fourth quarter of 2010, compared to 14.6% in the comparable period of 2009
Net income for the fourth quarter of 2010 was R$4.2 million or R$0.52 per basic and diluted share, compared to net income of R$3.3 million or R$0.41 per basic and diluted share in the same period of 2009.
"The outlook for our business remains positive. The recently elected new President, Mrs. Dilma Rousseff, is widely expected to follow the same successful economic policies of her predecessor, which we expect, will create a favorable environment for the continued growth of our business. In addition, we expect to benefit from spending associated with the infrastructure build-out to support the World Cup and the Olympics which will be hosted in Brazil in 2014 and 2016, respectively " said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. "Looking ahead, we plan to continue to pursue our multi-brand strategy with a focus on improving our operating efficiency to deliver profitable growth for our investors in the years ahead ," concluded Mr. Bomeny
Notable Share Transactions
Comments & Business Outlook
“We currently operate five convenience restaurant brands , including Bob’s, KFC, Pizza Hut, In Bocca al Lupo Café and Doggis. We have strategic plans to expand the Bob’s brand in the years ahead and to develop the “coffee” concept with the brand In Bocca al Lupo Café or with another name we are discussing for this activity and we have contractual agreements with Yum! Brands to expand the KFC chain in Brazil and Pizza Hut stores in the metropolitan area of São Paulo as well as with Grupo de Empresas Doggis to expand the Bob’s and Doggis brands in Chile and Brazil, respectively,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. “As we look to the future, our primary goal is to expand our existing brands in the Brazilian market. We will, however, continue to look for opportunities to add new restaurant concepts and to acquire new businesses that can strengthen our relationship with suppliers, improve our economies of scale and pre-empt the expansion of competitors in our markets. In addition, we will continue to selectively evaluate opportunities to expand our Bob’s brand in Latin America, leveraging our experience in Chile, where we currently have three restaurants,” concluded Mr. Bomeny. “
The Company currently plans to have 830 points of sale by the end of 2010 up from 673 in 2009.
The company expects to add 157 Bob’s stores, including 4 stores in Chile, 4 KFC, 2 Pizza Hut restaurants and 4 Pizza Hut delivery stations, and 6 Doggis and 6 Coffee stations with or without the brand In Bocca al Lupo Café points of sale.
The Company plans to expand the Bob’s brand through franchising by targeting cities with 150,000 to 250,000 inhabitants where the competitive environment is more favorable, and income levels are adequate to support the Company’s lower cost store designs.
Pizza Hut expansion in 2010 will be driven by Company owned stores and delivery stations, while KFC and Doggis expansion will be driven by franchising.
Source: Business Wire (April 1, 2010 )
