Minneapolis-based Southern Italian restaurant operator Buca has reported sales of US$60.9m for its Q2 ended 30 June 2002, up 40% from US$43.7m year on year.
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Buca also posted Q2 net income of US$2.8m (17 cents/share), up 15% compared to US$2.46m (15 cents /share) in the same period of the prior year. Weighted average fully diluted shares outstanding reached 17,067,934 for the Q2 compared to 16,962,276 for the Q2 2001.
The 40% increase in Q2 sales reflects sales from the ten restaurants opened during the Q1 and Q2 2002, the maturing of the 17 new restaurants opened in FY 2001 and the nine Vinny Testa’s restaurants acquired 14 January 2002. Comparable restaurant sales fell 1.3% for the 51 Buca di Beppo restaurants in the comparable restaurant base during the Q2 2002. Comparable restaurant sales also fell 6.9% at the seven Vinny Testa’s restaurants in the same time period. Both falls were due to a decrease in guest visits.
For the H1 ended 30 June 2002, Buca reported sales of US$117.2m, up 41% from US$83.16m year on year. Net income for the period was US$4.98m (29 cents/share) compared to net income of US$4.1m (25 cents/share) in the H1 2001.
The 41% increase in sales for the H1 2002 also reflects sales from the new and maturing restaurants opened during and just before the period. Comparable restaurant sales fell 2% during the H1 2002; 7.1% at the seven Vinny Testa’s restaurants. The decreases were also due to a decrease in guest visits.
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By GlobalDataExecutive comments
Joseph P. Micatrotto, chairman, president and CEO, commented: “In May comparable restaurant sales were trending positive, however sales softened considerably in late June and as a result comparable restaurant sales did not turn positive for the quarter as expected. Looking to the Q3 we will continue to refine our menu to strengthen and grow our appeal focusing on Take Out and Buca per Due.
Buca per Due
“Throughout the Q2 we continued to receive positive feedback from our guests regarding the introduction of our Buca per Due initiative, [which] now accounts for almost 10% of our total Buca di Beppo sales and as high as 20% of sales in the new restaurants.
“Due to the strength of the response and the effect we believe the initiative has in increasing our appeal with smaller parties, we are in the process of introducing additional elements that will become staples of the Buca per Due menu. We will continue to support the Buca per Due initiative with radio and billboard advertising in our most media efficient markets.
“In addition to the menu innovations that will be introduced as a part of our Buca per Due initiative, looking to the Q3 we will support our Saturday noon to 4pm day-part with new traditional immigrant Southern Italian dishes.
Take out boost
“Take Out also continues to be an important initiative for us, representing about 6% of our overall sales. During the coming months we will focus our efforts to continue to grow this segment.
New outlets
“We opened three new Buca di Beppo restaurants in the Q2. As a whole, the ten new outlets opened in the H1 2002 are averaging more than US$65,000 per week in sales. Since the close of the Q2 we have already opened the first restaurant slated to open in the Q3. We expect the 14 new restaurants to generate approximately 500 new sales weeks in FY 2002.
“We continue to expect that the Vinny Testa’s concept has the ability to grow to more than 50 restaurants in the six-state New England area, bringing the Buca capacity to 500 domestic restaurants with the two brands. Looking to new restaurant development in 2003, we plan to open about 19 Buca restaurants.”
Micatrotto concluded: “We expect comparable restaurant sales will increase 1-3% in the Q3 and 2-4% in the Q4. We continue to expect earnings per share (EPS) growth of nearly 50% for FY 2002, with fully diluted EPS of about 19 cents in the Q3 and 26 cents in the Q4. For the FY, we project fully diluted EPS of about 74 cents. We expect that the Vinny Testa’s concept and the Buca di Beppo concept will generate combined sales of about a US$0.25bn in FY 2002.”
