Fogo de Chão, Inc. (“Fogo” or the “Company”) (NASDAQ:FOGO) today
announced preliminary, unaudited financial results for its fiscal
third quarter ended October 1, 2017.
Third quarter 2017 financial results, on a
preliminary, unaudited basis, are expected to include the
following:
- Total revenue of approximately $71.4 million. Total
revenue in the quarter was negatively impacted by approximately
$0.9 million as a result of hurricane activity;
- Consolidated comparable restaurant sales decreased
5.1%(1);
- U.S. company-owned comparable restaurant sales decreased
2.1%(1). Excluding the impact of the hurricane activity
during the quarter, U.S company-owned comparable restaurant sales
decreased 1.4%;
- Brazil company-owned comparable restaurant sales decreased
17.1%. Excluding the impact of the two Rio de Janeiro
locations, Brazil company-owned comparable restaurant sales
increased 3.0%. The Rio de Janeiro locations’ results
included lapping last year’s Olympic Games and security issues in
that city during the quarter; and
- GAAP net income per share is expected to be between $0.08 and
$0.10, including an estimated impact from the hurricanes of
approximately $0.03.
Larry Johnson, Chief Executive Officer of Fogo
de Chão, Inc. stated, “Though we anticipated traffic pressures as a
result of lapping last year’s Olympic Games in Brazil, we also
continued to feel the impact of industry softness in the U.S.
Our third quarter results were further impacted by short-term
challenges, including three hurricanes; a spike in beef inflation
due to retail demand pressures; and security issues in Rio de
Janeiro, as a result of increased crime the government is currently
addressing. More specifically, as a result of the hurricane
activity, we lost 19 operating days during the quarter and
experienced a decline in sales and traffic that extended before
landfall through the post-hurricane clean up periods. At the
same time I am proud to share that we continued to pay our
employees throughout extended closures during what has been a very
difficult time for many.”
Johnson continued, “Irrespective of these third
quarter issues, the fundamentals of our business are healthy as
demonstrated by a return to more normalized operating activity
early in the fourth quarter. We remain committed to our
strategic platforms of daypart expansion, price optionality and
all-day value and continue to enhance these strategies with both
core and seasonal innovation, including our new fall menu which
features a limited-time, bone-in Cowboy Ribeye. We believe
this focus, as well as our enhanced group sales effort, positions
us well for the near and long term.”
“We are appreciative of the efforts of all of
our teams in the face of three devastating hurricanes. I want to
say a particular thank you to our team in the Houston area for
their incredible community efforts around Hurricane Harvey.
Since the storm, Fogo has served more than a half-million dollars
in meals to more than 12,500 medical, police and fire first
responders in the Houston area. It was a true honor to serve
the community, and we thank them for their service,” concluded
Johnson.
The Company maintains comprehensive insurance
coverage on all of its restaurants including property, flood and
business interruption. The Company is working with its insurance
providers to assess the overall impact from the three storms and
expects the assessment to take several weeks to complete.
Preliminary results remain subject to the
completion of normal quarter-end accounting procedures and
adjustments and are subject to change.
Development UpdateDuring the
quarter, the Company’s Middle East joint venture opened its first
restaurant, located in Jeddah, Saudi Arabia. The Company
expects to open at least two additional company-owned restaurants
during the fourth quarter of 2017.
Updated 2017 GuidanceThe
Company is updating its guidance for the 52-week fiscal year 2017,
which ends on December 31, 2017. GAAP diluted net income per share
is expected to range between $0.74 and $0.77, and adjusted diluted
net income per share is expected to range between $0.77 and
$0.80.(2) Diluted net income per share guidance for Fiscal 2017 is
based, in part, on the following annual assumptions:
- Total revenue of $306 million to $311 million, assuming an
exchange rate of 3.25 Brazilian reais to 1 U.S. dollar;
- Company-owned comparable restaurant sales of -1.5% to
-2.5%;
Guidance PolicyThe Company
intends to provide annual guidance as it relates to revenue,
comparable restaurant sales growth, restaurant contribution margin,
general and administrative expense, tax expense, and development
schedule during its third quarter 2017 earnings conference
call. The Company expressly disclaims any duty to update this
guidance.
(1) A restaurant in the comparable restaurant
base that is forced to close for at least four consecutive days is
removed from the comparable sales calculation for the full quarter
in which the closure occurred until the first full quarter
following the anniversary of the closure. Certain restaurants that
were directly impacted by Hurricane Harvey (two in Houston),
Hurricane Irma (one in Miami) and Hurricane Maria (one in San Juan)
were removed from the comparable restaurant sales base during the
third quarter of 2017. Restaurants indirectly impacted include
Orlando, Atlanta, Dunwoody, San Antonio, and Austin.
(2) The Company uses adjusted net income as a
non-GAAP financial measure for financial and operational decision
making and as a means to evaluate period-to-period comparisons. The
Company believes that they provide useful information about
operating results, enhance the overall understanding of past
financial performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. The non-GAAP measures
used by the Company in this press release may be different from the
methods used by other companies. A reconciliation of GAAP net
income per share to adjusted net income is included in the
accompanying financial
data.
Third Quarter 2017 Earnings Conference Call The
Company will host a conference call to discuss its third quarter
financial results on Tuesday, November 7, 2017 at 5:00 PM Eastern
Time. Hosting the call will be Larry Johnson, Chief Executive
Officer, Barry McGowan, President, and Tony Laday, Chief Financial
Officer. A press release with third quarter financial results will
be issued that same day, shortly after the market close. The
conference call can be accessed live over the phone by dialing
(877) 407-0789 or for international callers by dialing (201)
689-8562. A replay will be available two hours after the call and
can be accessed by dialing (844) 512-2921 or for international
callers by dialing (412) 317-6671; the passcode is 13671875. The
replay will be available through Tuesday, November 14, 2017. The
conference call will also be webcast live and later archived on
Fogo’s corporate website at ir.fogodechao.com under the ‘News &
Events’ section.
About Fogo de ChãoFogo de Chão (fogo-dee-shown)
is a leading Brazilian steakhouse, or churrascaria, which has
specialized for more than 37 years in fire-roasting high-quality
meats utilizing the centuries-old Southern Brazilian cooking
technique of churrasco. Fogo delivers a distinctive and authentic
Brazilian dining experience through the combination of high-quality
Brazilian cuisine and a differentiated service model known as
espeto corrido (Portuguese for "continuous service") delivered by
gaucho chefs. Fogo offers its guests a tasting menu of a variety of
meats including beef, lamb, pork and chicken, simply seasoned and
carefully fire-roasted to expose their natural flavors, a gourmet
Market Table with seasonal salads, soup and fresh vegetables,
seafood, desserts, signature cocktails and an award-winning wine
list. The first Fogo de Chão opened in Brazil in 1979. The Company
currently operates 36 restaurants in the United States, 9 in
Brazil, two joint venture restaurants in Mexico, and one joint
venture restaurant in Jeddah, Saudi Arabia. Visit FOGO.com for more
information.
Safe Harbor StatementThis release contains
forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, which are subject to
risks and uncertainties. Forward-looking statements relate to
expectations, beliefs, projections, guidance, future plans,
objectives and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts, such
as statements regarding our future financial condition or results
of operations, our prospects and strategies for future growth, the
development and introduction of new products, and the
implementation of our marketing and branding strategies.
Forward-looking statements can also be identified by words such as
“may,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” “seeks,”
“intends,” “targets” or the negative of these terms or other
comparable terminology. Forward-looking statements are not
guarantees of future performance and actual results may differ
significantly from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but
are not limited to, those discussed in the section entitled "Risk
Factors" in our recent annual report on Form 10-K for the fiscal
year ended January 1, 2017 filed with the Securities and Exchange
Commission, and our discussion of risks in our quarterly reports on
Form 10-Q. The forward-looking statements included in this press
release are made only as of the date hereof. Except as required by
applicable securities law, we undertake no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the
occurrence of unanticipated events.
Investor Contact:IR@fogodechao.com (972)
361-6225
Media Contact:Joy Murphy,
ICRJoy.Murphy@icrinc.com(646) 277‐1242
Reconciliation to Adjusted Net Income per Share
attributable to Fogo de Chão, Inc.
|
52-Week Fiscal Year Ended December 31,
2017 |
|
Low |
High |
GAAP Diluted Net Income
Per Share |
$ |
0.74 |
$ |
0.77 |
Secondary Offering
Costs |
|
0.02 |
|
0.02 |
Non-recurring expense
(a) |
|
0.01 |
|
0.01 |
Adjusted Diluted Net
Income Per Share |
$ |
0.77 |
$ |
0.80 |
|
|
|
(a) Reserve
for Brazilian Union settlement |
|
|
|
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