The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Joe Gomes - NOBLE Capital - Analyst
: So somewhat of a similar theme with the first quarter, revenues were up nicely, but expenses were up even and more. And here in the second
quarter, they grew even at a faster rate than they did in the first quarter. I understand part of that is due to the tax retention credits. But when do
we think we'll start to see that [flex] and where the revenue growth will exceed the expense growth on a quarterly basis?
Question: Joe Gomes - NOBLE Capital - Analyst
: Okay. Thanks.
But Andy, you talked about the new store development here. So in the second quarter, you had projected that you're going to open, I think it was
40-some-odd stores on the first quarter call, you project, you're going to open, I think 40-some-odd stores here in the second quarter. And obviously,
we fell short of that. You still seem to think you can come up to that 120-ish for the full year. Anything in particular that has caused the rate of store
openings to slow down from our initial expectations?
Question: Joe Gomes - NOBLE Capital - Analyst
: Okay. And then one more for me, I'll jump back in queue.
You talked about M&A and you still are assessing some opportunities. You mentioned the same thing in the first quarter call. Are these the same
opportunities or new opportunities come about here? You have seen a little bit of ups and downs here recently in the restaurant industry. I was
wondering if there's been maybe an opening, so to speak, of people looking to come to somebody like you, a consolidator and be more open on
price that maybe some of that has started to percolate.
Question: Alton Stump - Loop Capital - Analyst
: I just want to ask first off on the same-store sales being down only 1.6%, held flat on a two set basis sequentially versus the first quarter. I'm sure
you guys have all read, all of the negative news out there and for those that has come out with earnings, it probably going to be one, if not the
only one out there that actually kept to your stacks unchanged in 2Q versus the first quarter.
Clearly, you guys own, obviously, almost 20 different concepts. You've got a lot of different things going on for each concept. But was there any
handful of sort of key outperformers in your portfolio that you think enabled you to hold that to your stack trend flat in what was obviously a very
challenging quarter for the overall quick-service industry.
Question: Alton Stump - Loop Capital - Analyst
: Great. That's great color. Thank you for all that.
And then I guess just one other follow-up and I'll hop back in the queue, but you obviously are just now underway with your first conversion of
Smokey Bones to a Twin Peak. So it's all very early. I actually understand. But how has that gone so far? Have you learned anything yet that could
help you as you look to accelerate that conversion process, as you mentioned, not just over the course of the back half of this year but into the
next couple of year period?
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