Popeyes Louisiana Kitchen, Inc. (PLKI) has reported an 1.89 percent fall in profit for the quarter ended Oct. 02, 2016. The company has earned $10.40 million, or $0.49 a share in the quarter, compared with $10.60 million, or $0.46 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $12.60 million, or $0.59 a share compared with $10.70 million or $0.47 a share, a year ago.
Revenue during the quarter grew 4.75 percent to $64 million from $61.10 million in the previous year period. Gross margin for the quarter expanded 63 basis points over the previous year period to 65.94 percent. Total expenses were 72.34 percent of quarterly revenues, up from 70.70 percent for the same period last year. That has resulted in a contraction of 164 basis points in operating margin to 27.66 percent.
Operating income for the quarter was $17.70 million, compared with $17.90 million in the previous year period.
"We are pleased to report strong progress for the quarter" said Cheryl Bachelder, Popeyes chief executive officer. "We generated global same store sales of 1.8%, opened 25 net new global restaurants and announced the refranchising of the Indianapolis company-operated market. We continue to expand our brand which has led to the achievement of another record high market share of 26.9%. We are firmly on the path of achieving our long term bold growth goals and we are creating value for our franchisees and shareholders."
For fiscal year 2016, Popeyes Louisiana Kitchen, Inc. forecasts revenue to grow in the range of 1 percent to 2 percent. The company expects diluted earnings per share to be in the range of $2 to $2.05 and expects diluted earnings per share to be in the range of $2.10 to $2.15 on adjusted basis.
Operating cash flow improves
Popeyes Louisiana Kitchen, Inc. has generated cash of $51.40 million from operating activities during the nine month period, up 6.64 percent or $3.20 million, when compared with the last year period.
The company has spent $8.20 million cash to meet investing activities during the nine month period as against cash outgo of $11.10 million in the last year period. It has incurred net capital expenditure of $8.20 million on net basis during the nine month period, down 26.13 percent or $2.90 million from year ago period.
The company has spent $45.70 million cash to carry out financing activities during the nine month period as against cash outgo of $37.60 million in the last year period.
Cash and cash equivalents stood at $6.60 million as on Oct. 02, 2016, down 16.46 percent or $1.30 million from $7.90 million on Oct. 04, 2015.
Working capital increases
Popeyes Louisiana Kitchen, Inc. has recorded an increase in the working capital over the last year. It stood at $4.70 million as at Oct. 02, 2016, up 6.82 percent or $0.30 million from $4.40 million on Oct. 04, 2015. Current ratio was at 1.09 as on Oct. 02, 2016, up from 1.08 on Oct. 04, 2015.
Days sales outstanding were almost stable at 12 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding went down to 22 days for the quarter from 24 for the same period last year.
Debt increases substantially
Popeyes Louisiana Kitchen, Inc. has witnessed an increase in total debt over the last one year. It stood at $156.40 million as on Oct. 02, 2016, up 42.57 percent or $46.70 million from $109.70 million on Oct. 04, 2015. Total debt was 61.48 percent of total assets as on Oct. 02, 2016, compared with 40.99 percent on Oct. 04, 2015. Debt to equity ratio was at 19.80 as on Oct. 02, 2016, up from 1.75 as on Oct. 04, 2015.
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