Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BurgerFi International Inc is focused on driving revenue growth and enhancing operational efficiencies through strategic priorities, including infrastructure improvements and technology upgrades.
- The company has successfully implemented an inventory management platform at BurgerFi and is rolling out a new POS system at Anthony's, which is expected to improve cost management and operational excellence.
- BurgerFi International Inc is innovating with new product offerings such as the Heinz remix machine and the Better Burger Lab in New York City, aiming to enhance customer experience and drive traffic.
- The company is actively managing its portfolio, with new franchise agreements and the development of non-traditional space locations to expand its brand presence and accessibility.
- Despite challenges, BurgerFi International Inc is making progress in stabilizing restaurant teams, with improved retention and turnover rates, which are expected to reduce costs and improve service quality.
Negative Points
- BurgerFi International Inc experienced a decrease in total revenues and profitability in the first quarter of 2024, attributed to softening in revenue and a challenging consumer environment.
- The company reported a net loss of $6.5 million in the first quarter, although this was an improvement from the previous year's loss of $9.2 million.
- Same-store sales have declined at both BurgerFi and Anthony's brands, with significant decreases in system-wide sales for BurgerFi.
- Restaurant-level profit margins have decreased due to lost sales leverage and higher wages, impacting overall financial performance.
- BurgerFi International Inc is facing operational challenges with the rollout of new systems, such as the POS system at Anthony's, which initially encountered typical new platform challenges.
Q & A Highlights
Q: Could you discuss the initiatives in place to reignite traffic, particularly regarding the chicken sandwich rollout?
A: Carl Bachmann, CEO, mentioned that chicken remains a significant trend in the industry, aiming for a chicken mix of 10-12% in their burger concept. The company has launched new grilled and fried chicken options in corporate stores and is expanding this to franchise stores. A major promotional campaign is planned for the summer to boost the new chicken offerings.
Q: Was the introduction of the new chicken options incremental or did it lead to cannibalization of other products?
A: Carl Bachmann, CEO, explained that the introduction, especially of the grilled chicken which was previously not offered, was incremental. It contributed to 2-3% of incremental growth, particularly noted in the test stores in Florida.
Q: Can you elaborate on the success of the targeted promotions mentioned in your prepared remarks?
A: Carl Bachmann, CEO, highlighted the success of promotions tied to social holidays, which significantly drive trial and excitement. For example, a promotion on March 14 resulted in substantial sales, and these events also lead to spikes in loyalty program sign-ups, which is a strategic focus for the company.
Q: Do the benefits of promotions on social holidays extend beyond the event itself?
A: Carl Bachmann, CEO, confirmed that these promotions do have a lasting impact, primarily through increased sign-ups to their loyalty programs. This allows the company to market directly to these customers, turning them into frequent visitors and integrating them into the brand's community.
Q: Could you provide insights into the financial performance for the first quarter of 2024?
A: Christopher Jones, CFO, reported a decrease in total revenues to $42.9 million, down 6% year-over-year, primarily due to lower same-store sales and the closure of underperforming locations. The net loss improved to $6.5 million from $9.2 million in the previous year, with adjusted EBITDA at $258,000.
Q: What are the expectations for the fiscal year 2024 in terms of financial performance?
A: Christopher Jones, CFO, maintained the guidance with total revenue expected to be between $170 million and $180 million, assuming a low-single digit increase in same-store sales and the addition of 10 to 15 new franchise restaurants. Adjusted EBITDA is projected to range from $7 million to $9 million, with capital expenditures anticipated to be $2 million to $3 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
