Atlanta-based AFC Enterprises, the parent company of Popeyes, said revenue dipped slightly in the second quarter but profits rose thanks to a reduction in general and administrative expenses.
Reported net income was $6.8 million or $0.26 per share, up from $6.4 million or $0.25 per share in the same period last year. Total systemwide sales rose 2.8 percent, a slower pace than the 4.9 percent increase last year.
Sales at stores open at least a year increased 0.6 percent, compared with a 4.3 percent increase last year. The company said the May 31 introduction of "Wicked Chicken," boneless strips of marinated and breaded chicken, was the primary reason for the sales increase in the second quarter.
Popeyes has about 1,945 restaurants in the U.S., Guam, Puerto Rico, 26 foreign countries and the Cayman Islands, a British Overseas Territory. About 80 percent of its units are in the U.S. Popeyes competes with KFC, Church's Chicken, Bojangles' and El Pollo Loco, among others.
The company said it outperformed the chicken fast-food category while posting higher customer satisfaction scores and speeding up its service.
"Generally speaking, KFC and Chick-fil-A are the leaders, and the others are trying to reinvent themselves in order to gain market share," said David Pavesic, a professor who teaches restaurant management at Georgia State University's Robinson College of Business.
During the second quarter, Popeyes cut its outstanding debt by $8.2 million. It also raised earnings guidance for 2010. The company said it planned to increase its restaurant count by between 30 and 50 this year.
Popeyes predicted sales at established stores this year would be between flat and up 2 percent. Previously, the company had said its sales might drop in 2010.
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