Carrols Restaurant Group Inc. (TAST) filed Quarterly Report for the period ended 2009-09-27.
CARROLS RESTAURANT GROUP INC. operating through its subsidiaries including Carrols Corporation is one of the largest restaurant companies in the United States. The Company operates three restaurant brands in the quick-casual and quick-service restaurant segments with over five hundred company-owned and operated restaurants in 16 states and several franchised restaurants in the United States Puerto Rico and Ecuador. Carrols Restaurant Group owns and operates two Hispanic Brand restaurants Pollo Tropical and Taco Cabana. It is also the largest Burger King franchisee based on number of restaurants and has operated Burger King restaurants since 1976. Carrols Restaurant Group Inc. has a market cap of $149.4 million; its shares were traded at around $6.92 with a P/E ratio of 7.4 and P/S ratio of 0.2.
Highlight of Business Operations:
Operating Costs and Expenses. Cost of sales as a percentage of total restaurant sales decreased to 28.7% in the third quarter of 2009 from 30.5% in the third quarter of 2008. Pollo Tropical cost of sales, as a percentage of Pollo Tropical restaurant sales, decreased to 32.9% in the third quarter of 2009 from 33.2% in the third quarter of 2008 due primarily to the effect of menu price increases taken in 2008 and lower fuel surcharges (0.3% of Pollo Tropical sales) partially offset by lower margins on new menu items and increased promotional discounting (0.3% of Pollo Tropical sales). Taco Cabana cost of sales, as a percentage of Taco Cabana restaurant sales, decreased to 28.7% in the third quarter of 2009 from 30.7% in the third quarter of 2008 due primarily to the effect of menu price increases taken in 2008, less product waste from increased food controls (0.4% of Taco Cabana sales) and lower commodity prices (1.0% of Taco Cabana sales) including cheese, partially offset by increased promotional discounting (0.8% of Taco Cabana sales). Burger King cost of sales, as a percentage of Burger King restaurant sales, decreased to 26.8% in the third quarter of 2009 from 29.2% in the third quarter of 2008 due primarily to the effect of menu price increases taken in 2008, lower commodity prices (2.0% of Burger King sales) including lower beef prices (1.3% of Burger King sales) and lower fuel surcharges (0.3% of Burger King sales) partially offset by higher discounts and promotions (0.4% of Burger King sales).
Restaurant wages and related expenses, as a percentage of total restaurant sales, increased to 29.4% in the third quarter of 2009 from 28.6% in the third quarter of 2008. Pollo Tropical restaurant wages and related expenses, as a percentage of Pollo Tropical restaurant sales, decreased to 24.4% in the third quarter of 2009 from 24.7% in the third quarter of 2008 due primarily to lower workers compensation claim costs (0.6% of Pollo Tropical sales) partially offset by higher restaurant-level performance bonuses (0.3% of Pollo Tropical sales). Taco Cabana restaurant wages and related expenses, as a percentage of Taco Cabana restaurant sales, increased to 30.2% in the third quarter of 2009 from 28.7% in the third quarter of 2008 due to the effect of lower sales volumes on fixed labor costs and higher medical and workers compensation insurance claim costs (0.7% of Taco Cabana sales). Burger King restaurant wages and related expenses, as a percentage of Burger King restaurant sales, increased to 31.2% in the third quarter 2009 from 30.3% in the third quarter of 2008 due primarily to the effect of lower sales volumes on fixed labor costs.
Tropical restaurant sales, decreased to 14.3% in the third quarter of 2009 from 15.8% in the third quarter of 2008 due primarily to lower utility costs (0.5% of Pollo Tropical sales), lower repair and maintenance expenses (0.4% of Pollo Tropical sales), lower general liability claim costs (0.2% of Pollo Tropical sales) and lower recruiting costs due to lower restaurant employee turnover. Taco Cabana other restaurant operating expenses, as a percentage of Taco Cabana restaurant sales, decreased to 15.0% in the third quarter of 2009 from 15.8% in the third quarter of 2008 due primarily to lower utility costs (0.5% of Taco Cabana sales) and lower repair and maintenance expenses (0.2% of Taco Cabana sales). Burger King other restaurant operating expenses, as a percentage of Burger King restaurant sales, decreased to 15.0% in the third quarter of 2009 from 15.3% in the third quarter of 2008 due primarily to lower utility costs (0.7% of Burger King sales) partially offset by the effect of lower sales volumes on other fixed operating costs.
Advertising expense, as a percentage of total restaurant sales, increased to 4.0% in the third quarter of 2009 from 3.7% in the third quarter of 2008. Pollo Tropical advertising expense, as a percentage of Pollo Tropical restaurant sales, was 2.5% in the both the third quarter of 2008 and 2009. Pollo Tropical advertising costs are currently expected to be approximately 2.4% to 2.6% of Pollo Tropical restaurant sales for all of 2009, but there can be no assurance in this regard. Taco Cabana advertising expense, as a percentage of Taco Cabana restaurant sales, increased to 4.7% in the third quarter of 2009 from 3.7% in the third quarter of 2008 due primarily to a timing of promotions within both years. Taco Cabana advertising costs are currently expected to be approximately 4.0% to 4.2% of Taco Cabana restaurant sales for all of 2009, but there can be no assurance in this regard. Burger King advertising expense, as a percentage of Burger King restaurant sales, decreased to 4.2% in the third quarter of 2009 from 4.3% in the third quarter of 2008 due to decreased promotional activities in certain of our Burger King markets. Our Burger King advertising costs are currently expected to be approximately 4.2% of our Burger King restaurant sales for all of 2009, but there can be no assurance in this regard.
Operating Costs and Expenses. Cost of sales as a percentage of total restaurant sales decreased to 29.0% in the first nine months of 2009 from 30.1% in the first nine months of 2008. Pollo Tropical cost of sales, as a percentage of Pollo Tropical restaurant sales, decreased to 33.1% in the first nine months of 2009 from 33.2% in the first nine months of 2008 due primarily to the effect of menu price increases taken in 2008 substantially offset by higher chicken commodity prices (0.2% of Pollo Tropical sales) and higher prices of other commodities (1.2% of Pollo Tropical sales). Taco Cabana cost of sales, as a percentage of Taco Cabana restaurant sales, decreased to 29.0% in the first nine months of 2009 from 30.9% in the first nine months of 2008 due primarily to the effect of menu price increases taken in 2008, lower fuel surcharges (0.2% of Taco Cabana sales) and less product waste from increased food controls (0.3% of Taco Cabana sales) Lower commodity prices for cheese (0.9% of Taco Cabana sales) were offset by increases in the price of other commodities. Burger King cost of sales, as a percentage of Burger King restaurant sales, decreased to 27.0% in the first nine months of 2009 from 28.2% in the first nine months of 2008 due primarily to lower commodity costs (0.6% of Burger King sales) including lower beef costs (0.5% of Burger King sales), higher vendor rebates (0.3% of Burger King sales) and lower fuel surcharges (0.2% of Burger King sales). Increases in sales from lower margin menu items (0.9% of Burger King sales) were offset by the effect of menu price increases taken in 2008.
Other restaurant operating expenses, as a percentage of total restaurant sales, decreased to 14.6% in the first nine months of 2009 from 15.2% in the first nine months of 2008. Pollo Tropical other restaurant operating expenses, as a percentage of Pollo Tropical restaurant sales, decreased to 14.1% in the first nine months of 2009 from 14.8% in the first nine months of 2008 due primarily to lower repair and maintenance expenses (0.7% of Pollo Tropical sales). Taco Cabana other restaurant operating expenses, as a percentage of Taco Cabana restaurant sales, decreased to 14.3% in the first nine months of 2009 from 15.3% in the first nine months of 2008 due primarily to lower utility costs (0.5% of Taco Cabana sales), lower repair and maintenance expenses (0.3% of Taco Cabana sales) and lower security related costs. Burger King other restaurant operating expenses, as a percentage of Burger King restaurant sales, decreased to 15.1% in the first nine months of 2009 from 15.3% in the first nine months of 2008 due primarily to lower utility costs (0.4% of Burger King sales) partially offset by higher credit card fees (0.1% of Burger King sales).
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