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.
Continue Reading Below
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."
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.
10 stocks we like better than Bojangles'When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Bojangles' wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of July 6, 2017