Carrols Restaurant Group, Inc. (NASDAQ:TAST) announced better-than-expected fourth-quarter 2017 results on Wednesday morning, punctuated by the benefits of acquired locations, new restaurant openings, and a fast-food concept that diners just can't seem to get enough of.

Let's loosen our belts, then, to get a better taste of how the nation's largest Burger King Franchisee topped off the year, as well as what investors can expect in the coming quarters.

A Burger King Restaurant under white clouds during the day


Carrols Restaurant Group results: The raw numbers


Q4 2017

Q4 2016

Year-Over-Year Change

Restaurant sales

$284.0 million

$240.8 million


GAAP net income

$3.9 million

$29.5 million


GAAP earnings per share





What happened with Carrols Restaurant Group this quarter?

  • On an adjusted (non-GAAP) basis -- which notably excludes items like acquisition expenses and a $0.68-per-share benefit in last year's fourth quarter related to the reversal of the valuation allowance against deferred tax assets -- Carrols' net income was $3.8 million, or $0.08 per share, up from $0.04 per share in the same year-ago period.
  • Both the top and bottom lines compared favorably to investors' expectations for adjusted earnings of $0.05 per share on sales of $272.7 million.
  • Full-year 2017 restaurant sales climbed 15.4% to $1.09 billion, above guidance provided last quarter for $1.07 billion to $1.08 billion.
  • Comparable-restaurant sales grew 8.9% year over year in the fourth quarter.
  • Quarterly adjusted EBITDA rose 26.5% to $25.8 million.
  • In 2017, Carrols acquired 64 Burger King restaurants, opened 11 new restaurants, and closed 21 restaurants, bringing its total to 807 locations.

What management had to say

CEO Daniel Accordino said:

We finished the year strong as fourth quarter comparable restaurant sales rose an impressive 8.9% on top of a 3.2% gain in the year-ago period reflecting sales strength and traffic gains across all day parts. Promotions such as the 2 for $6 WHOPPER Sandwich and several other premium and value offerings proved popular and demonstrated the efficacy of BURGER KING's marketing strategy in balancing premium, value and limited time products to drive both average check and customer traffic. We also leveraged our strong sales performance with higher Restaurant-level EBITDA and adjusted EBITDA, along with improved operating margins compared to the prior year period.

Accordino added that while they expect elevated promotions to persist going forward, the operating margin pressure we saw last quarter from high commodity prices and increased wages "should be more modest in 2018."

Looking forward 

Finally, Accordino elaborated that Carrols Restaurant Group has "solid momentum going into 2018." Thus, it's modestly increasing its full-year 2018 outlook to call for total restaurant sales to be in the range of $1.14 billion to $1.17 billion (up from $1.12 billion to $1.15 billion previously) and for adjusted EBITDA of $93 million to $100 million (a $3 million increase from the lower end of its previous range).

In the end, putting aside both Carrols' modest outpeformance to end the year and its optimistic forward guidance, there were no big surprises in this report. Rather, the company keeps finding ways to help Burger King continue resonating with consumers despite today's increasingly crowded restaurant environment. For that, I think patient, long-term investors should be more than pleased.

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