Popeye's 2015 Annual Report Download - page 33

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with our Selected Financial Data, our Consolidated
Financial Statements and our Risk Factors that are included elsewhere in this filing.
Our discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements, as a result of a number of factors including those factors set forth in
Item 1A. of this Annual Report and other factors presented throughout this filing.
Nature of Business
Popeyes develops, operates, and franchises quick-service restaurants under the trade names Popeyes® Louisiana Kitchen and
Popeyes® Chicken & Biscuits (collectively “Popeyes”) in 48 states, the District of Columbia, Puerto Rico, Guam, the Cayman
Islands, and 27 foreign countries. Popeyes has two reportable business segments: franchise operations and company-operated
restaurants. Financial information concerning these business segments can be found at Note 20 to our Consolidated Financial
Statements.
2015 Overview
We accomplished the following results in 2015 as a result of disciplined execution against our strategic plan:
Earnings:
• Reported net income was $44.1 million, or $1.91 per diluted share, compared to $38.0 million, or $1.60 per diluted
share, in 2014. Adjusted earnings per diluted share were $1.91 compared to $1.65 in 2014, representing an increase
of 15.8%. Adjusted earnings per diluted share is a supplemental non-GAAP measure of performance. See the heading
entitled “Management’s Use of Non-GAAP Financial Measures.”
System Sales Performance:
• Global system-wide sales increased approximately 11.8%, for a two-year compounded growth rate of over 25%.
• Global same-store sales increased 5.9% in 2015, compared to a 6.2% increase last year, for a two-year compounded
growth rate of 12.5%.
• Total domestic same-store sales increased 5.7%, compared to 6.3% last year. For seven consecutive years, our domestic
same-store sales have outpaced the Chicken-Quick Service Restaurant and the Quick Service Restaurant categories,
according to independent data. This positive sales growth reflects Popeyes continued menu innovation, supported by
expanded advertising and strengthened restaurant execution, which has led to an increase in Popeyes market share of
the Chicken-Quick Service Restaurant category to 25.5% for 2015 from 23.2% in 2014.
• International same-store sales increased 7.0%, compared to 5.1% last year, primarily due to sales in Turkey, Canada
and our Latin America region. This marks the the ninth consecutive year of positive international same-store sales
growth.
Openings:
• The Popeyes system opened 219 restaurants, which included 125 domestic and 94 international restaurants, compared
to 201 last year. Included in the domestic openings were five Company-operated restaurants. The Popeyes system
opened more new restaurants in fiscal 2015 than in any single year in the last 17 years.
• Net openings were 166 compared to 148 net restaurant openings in 2014. This represents approximately 7% net unit
growth.
Key Financial Metrics:
• Total revenues increased approximately 9.9% to $259.0 million in 2015, from $235.6 million in 2014.
• Company-operated restaurant operating profit was $21.9 million, or 20.0% of sales, compared to $18.4 million, or
18.9% of sales in 2014.
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