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Shares of Bojangles' Inc. (NASDAQ: BOJA) plunged 15% Friday after the fast-food chain announced mixed second-quarter 2017 results and lowered its full-year guidance.
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.
"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."
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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.
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