What happened
Shares of Bojangles' Inc. (BOJA +0.00%) plunged 15% Friday after the fast-food chain announced mixed second-quarter 2017 results and lowered its full-year guidance.
So what
Quarterly revenue rose 2.1% year over year to $134.4 million, as contributions from new locations were offset by a system-wide comparable-restaurant sales decline of 1.4%. On the bottom line, adjusted net income declined 10.9% to $9 million and fell 14.8% on a per-share basis to $0.23. Analysts, on average, were expecting lower adjusted earnings of $0.22 per share, but on slightly higher revenue of $135 million.
Image source: Bojangles.
"The continuing challenging conditions in the limited-service restaurant industry require navigating with experience, a clearly defined plan, and a willingness to make adjustments when necessary to stay competitive and relevant," stated Bojangles' CEO Clifton Ruteledge. "We believe in a steady, deliberate, and measured approach to expansion, ensuring operational excellence, integrating technology, and creating the best Bojangles' experience possible."
Now what
For the full year of 2017, Bojangles' now expects total revenue in the range of $549 million to $553 million (down from $560 million to $569 million previously), including a decline in system-wide comparable restaurant sales in the low-single-digit percent range (compared to previous guidance for negative low-single digits to flat from 2016).
Bojangles' also reduced its guidance for new openings of 53 to 56 system-wide restaurants (down from 57 to 62) this year and called for a net increase of 45 to 48 system-wide locations (down from 49 to 54). Finally, the company now anticipates adjusted net income per diluted share for the year of $0.81 to $0.84 (down from $0.87 to $0.93).
All things considered, this certainly wasn't a bad quarter from Bojangles'. But the company's guidance obviously indicates challenges ahead in today's difficult restaurant industry environment. So it's no surprise to see investors taking a step back from Bojangles' stock today.
