Del Frisco's Restaurant Group Reports Fourth Quarter Numbers

Mar 01, 2016 Industry News
Industry News

Del Frisco’s Restaurant Group, Inc., the owner and operator of the Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse, and Del Frisco’s Grille restaurant concepts, reported financial results for the fourth quarter ended December 29. 

Key highlights from the fourth quarter 2015 compared to the fourth quarter 2014 include:

  • Consolidated revenues increased 7.8 percent to $114.1 million from $105.8 million.
  • Revenues at Del Frisco’s Grille increased 32.5 percent to $32.5 million from $24.5 million.
  • Comparable restaurant sales decreased 1.6 percent at Del Frisco’s Double Eagle Steak House.
  • Comparable restaurant sales decreased 1.8 percent at Sullivan’s Steakhouse.
  • Comparable restaurant sales decreased 4.5 percent at Del Frisco’s Grille.
  • Cost of sales, as a percentage of consolidated revenues, improved to 29 percent from 30.2 percent.

Key highlights from the fiscal year 2015 compared to the fiscal year 2014 include:

  • Consolidated revenues increased 9.9 percent to $331.6 million from $301.8 million.
  • Revenues at Del Frisco’s Grille increased 30.2 percent to $90.8 million from $69.8 million.
  • Comparable restaurant sales increased 0.1 percent at Del Frisco’s Double Eagle Steak House.
  • Comparable restaurant sales increased 0.2 percent at Sullivan’s Steakhouse.
  • Comparable restaurant sales decreased 4.1 percent at Del Frisco’s Grille.
  • Cost of sales, as a percentage of consolidated revenues, improved to 28.9 percent from 30.2 percent.

Mark S. Mednansky, chief executive officer of Del Frisco's Restaurant Group, Inc., says, “While our fourth quarter results fell short of our expectations, we are executing the initiatives that we put in place during 2015 to improve guest engagement and their dining experience, refine brand messaging, and ensure flawless operations through a culture of accountability.  We have more to accomplish but are encouraged by the progressive improvements we experienced during the fourth quarter and will build on that work in 2016.”

Mednansky concludes, “We were pleased with our class of 2015 Del Frisco’s Grilles but are slowing our development pace to just two or three Del Frisco’s Grille openings and one Del Frisco’s Double Eagle relocation this year. This is essential to help us realize our organizational objectives as it enables us to devote more time and resources to existing restaurants. We are also using this transitional period to fine-tune our site selection process and increase the potential return on investment at future Del Frisco’s Grille locations leveraging a less costly, smaller, and more efficient prototype. We believe that our work over the next four quarters will pay long-term dividends that will benefit all shareholders and position us for growth in 2017 and beyond.”

Review of Fourth Quarter 2015 Operating Results

Consolidated revenues increased $8.3 million, or 7.8 percent, to $114.1 million in the fourth quarter of 2015 from $105.8 million in the fourth quarter of 2014. Total net operating weeks increased to 815 from 712. Total comparable restaurant sales decreased 2.2 percent in the fourth quarter of 2015 following a total comparable restaurant sales increase of 2.4 percent in the fourth quarter of 2014.

General and Administrative expenses increased $0.2 million to $6.5 million in the fourth quarter of 2015 from $6.3 million in the fourth quarter of 2014. As a percentage of consolidated revenues, general and administrative costs improved to 5.7 percent from 6.0 percent.

During the fourth quarter of 2015, the company incurred a net $1.4 million in lease termination and closing costs related to the closing of two Del Frisco’s Grille locations in Phoenix, Arizona and Palm Beach, Florida.

Del Frisco’s Double Eagle Steak House

Revenues increased 3 percent, or $1.6 million, to $55.6 million in the fourth quarter of 2015 from $53.9 million in the fourth quarter of 2014. This increase was primarily due to an additional 17 operating weeks during the quarter (to 192 from 175), partially offset by a 1.6 percent decrease in comparable restaurant sales. The decline in comparable restaurant sales was comprised of a 2.4 percent decrease in customer counts, partially offset by a 0.8 percent increase in average check. 

Sullivan’s Steakhouse

Revenues decreased 5 percent, or $1.4 million, to $26 million in the fourth quarter of 2015 from $27.4 million in the fourth quarter of 2014. This decrease was due to 16 fewer operating weeks during the quarter (to 288 from 304) as a result of a restaurant closure in late May 2015, as well as a 1.8 percent decrease in comparable restaurant sales. The decline in comparable restaurant sales was comprised of a 2.1 percent decrease in customer counts, partially offset by a 0.3 percent increase in average check.

Del Frisco’s Grille

Revenues increased 32.5 percent, or $8 million, to $32.5 million in the fourth quarter of 2015 from $24.5 million in the fourth quarter of 2014. This increase was primarily due to 102 additional net operating weeks (to 335 from 233) partially offset by a 4.5 percent decrease in comparable restaurant sales. The decline in comparable restaurant sales was comprised of a 0.7 percent decrease in customer counts and a 3.8% decrease in average check. 

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.