Carrols Restaurant Group, Inc. (NASDAQ:TAST) released delicious second-quarter 2018 results earlier this month, including solid top-line growth and improved profitability on the strength of its massive (and growing) portfolio of Burger King franchises.

With shares up 10% on the heels of that report, let's dig in to get a better idea of what drove Carrols over the past few months and what investors can expect in the coming quarters.

Man in business suit drawing arrow chart indicating gains


Carrols Restaurant Group results: The raw numbers


Q2 2018

Q2 2017

Year-Over-Year Change

Restaurant sales

$303.0 million

$279.5 million


GAAP net income

$7.8 million

$6.0 million


GAAP earnings per share




DATA SOURCE: CARROLS RESTAURANT GROUP. GAAP = generally accepted accounting principles.

What happened with Carrols Restaurant Group this quarter?

  • Adjusted for items like stock-based compensation and acquisition expenses, Carrols' (non-GAAP) net income was $10.0 million, or $0.22 per diluted share, roughly $0.02 per share above consensus expectations and up from $6.6 million, or $0.14 per share, in the same year-ago period.
  • Comparable-restaurant sales grew 5% year over year, including 0.6% growth in traffic and a 4.4% increase in average check size.
  • At the end of the second quarter, Carrols owned and operated 807 Burger King Restaurants, as two new locations opened during the quarter offset two closed restaurants.
  • Adjusted EBITDA increased 19.4%, to $32.8 million. Adjusted EBITDA margin expanded 100 basis points, to 10.8% of restaurant sales.
  • Restaurant-level EBITDA grew 16.7%, to $47.4 million.

What management had to say

"Sales were strong across all day parts and reflected continued success of the 2 for $6 mix and match promotion, and the popularity of the KING Sandwich line including the new Sourdough sandwiches," stated Carrols Restaurant Group CEO Daniel Accordino. "These offerings provided an effective balance to our value promotions and other limited time offers as part of the brand's successful barbell menu strategy."

Accordino also noted that the company recently exercised its right of first refusal to purchase 31 Burger King restaurants across Virginia and two locations in Michigan. Carrols expects the purchases to close along with two other small acquisitions (totaling four additional restaurants) before the end of the third quarter.

Looking forward 

Given its relative strength so far this year, Carrols also increased its full-year guidance to call for total restaurant sales of $1.16 billion to $1.18 billion (up $10 million from both ends of its previous range), assuming comparable-restaurant sales growth of 3% to 4% (narrowed from 3% to 5% before). Carrols further expects 2018 adjusted EBITDA of $100 million to $105 million, up from its old outlook of $95 million to $102 million.

In the end, this was as strong a quarter as Carrols investors could have hoped for as the company capitalizes on the popular Burger King concept and efficiently manages its enviable restaurant portfolio. And the stock rightly is rivaling its all-time high in response.