Shares of Charlotte-based Bojangles’ fell 15 percent on Friday after the Charlotte-based fast food chain lowered 2017 revenue projections a day earlier.
Bojangles’ shares ended the day at $13.30, the lowest closing price since the company went public in May 2015. The slump came a day after the chain said second-quarter net income fell 14.1 percent from a year ago and that system-wide comparable restaurant sales slipped 1.4 percent.
Bojangles’, which maintains 600-plus restaurants nationwide, on Thursday also reduced its estimated revenue range for the year to $549 million to $553 million from its previous guidance of $560 million to $569 million.
“The continuing challenging conditions in the limited service restaurant industry require navigating with experience, a clearly defined plan and a willingness to make adjustments when necessary to stay competitive and relevant,” Bojangles’ CEO Clifton Rutledge said in a statement, adding the company believes in a deliberate approach to expansion.
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Amid higher expenses, net income was $8.6 million, or 22 cents per share, compared with $10 million, or 27 cents per share, in the second quarter of 2016.
Total revenues in the second quarter increased 2.1 percent to $134.4 million from a year ago. The increase was primarily due to a net additional 51 system-wide restaurants compared to a year ago, partially offset by the comparable restaurant sales declines.
Bojangles’ opened 14 system-wide restaurants – seven company-operated restaurants and seven franchised restaurants – in the first half of 2017. Five company-operated restaurants were also refranchised.
The company expanded its footprint into markets near its current territory, having recently signed several franchise development agreements in Virginia and Washington, D.C., among others.
“Franchisees will continue to lead our expansion efforts as we intend to open fewer new company-operated restaurants on a go-forward basis,” Rutledge said.