Share price of Bojangles', Inc. BOJA increased 5.8% in aftermarket hours on Aug 6 after the company posted better than expected second quarter 2015 earnings and raised its revenue expectations for 2015.
The latest results marked the second quarterly results of this quick service restaurant chain specializing in chicken items, which began trading on the NASDAQ in May 2015.
Earnings and Revenue Discussion
Adjusted earnings of 21 cents per share beat the Zacks Consensus Estimate of 16 cents by 31.3%. However, it fell 36% year over year as an increase in expenses was partially offset by an increase in revenues.
Total revenues of $120.5 million marginally missed the consensus mark of $121.0 million. However, it grew 13% year over year due to sales from new restaurant openings and a 13.3% increase in company restaurant revenues and a 12.2% increase in franchise royalty revenues.
Behind the Headline Numbers
System-wide comparable restaurant sales (comps) were up 4.4% in the second quarter but compared unfavorably with prior quarter comps growth of 7.9%. Company-operated comps grew 3.3% due to price increase and favorable commodity environment. This compared unfavorably with prior quarter comps growth of 7.1%. Also, franchised comps growth of 5.1% compared unfavorably with 8.4% growth in the prior quarter.
Restaurant contribution margin was 19.1%, up 170 basis points (bps) year over year due to an increase in revenues. Total company restaurant operating expenses went up 11% year over year to $94.9 million.
Revenue Guidance for 2015 Raised
Bojangles' increased its revenue guidance for 2015 and expects it in the range of $483.5 million to $487.5 million, up from the previous expected range of $480.0 million to $487.0 million.
Earnings per share are expected in the range of 75 cents to 78 cents per share, well above the Zacks Consensus Estimate of 69 cents.
System-wide comparable restaurant sales growth is expected in low to mid-single digits.
Bojangles' presently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other well-ranked stocks in the same industry are BJ's Restaurants, Inc. BJRI, Carrols Restaurant Group, Inc. TAST and Ruby Tuesday, Inc. RT. All these stocks sport a Zacks Rank #1 (Strong Buy).
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