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Bojangles’, in its first earnings report, beats analysts’ expectations

In its first earnings report as a public company, Charlotte-based Bojangles’ beat analysts’ expectations, with first-quarter adjusted net income that rose 24 percent from a year ago.
In its first earnings report as a public company, Charlotte-based Bojangles’ beat analysts’ expectations, with first-quarter adjusted net income that rose 24 percent from a year ago. KEVIN ZIECHMANN - kziechmann@cha

In its first earnings report as a public company, Bojangles’ said Thursday that its fiscal first-quarter profits fell 32 percent from the prior year on costs associated with its initial public offering, but the results beat analyst expectations.

Net income for the Charlotte-based restaurant chain in the 13-week period ended March 29 was $3.4 million, compared with $5 million in last year’s first quarter.

Adjusted earnings were 17 cents a share. Bloomberg-surveyed analysts called for adjusted earnings of about 15 cents a share.

Adjusted net income, which accounted for $2.7 million in IPO costs, was $6.2 million. That compared with $5 million in last year’s first quarter.

The company said total revenue increased 19.2 percent to $114.6 million. System-wide comparable restaurant sales – representing locations open at least a year – increased 7.9 percent from the prior-year period.

Clifton Rutledge, president and chief executive officer of Bojangles’, said the chain is working hard to ensure a constant flow of traffic. He said the company will continue to focus on providing high-quality food and customer service in order to propel growth.

“Our mission is to win the hearts of our customers by delivering quality service all day, every day,” Rutledge said in a conference call with analysts late Thursday.

On Thursday, Bojangles’ shares, which trades on the Nasdaq under the symbol “BOJA,” closed at $25.84, up 1.67 percent. But in after-hours trading, the shares fell more than 3 percent to $25.

In its IPO, the restaurant chain sold 8.9 million shares at a price of $19 each, raising over $169 million for the selling shareholders. In its first day of trading May 8, the company’s stock surged as much as 47 percent before closing up 25 percent to $23.75.

But last week, analysts seemed guarded about the restaurant’s stock: Seven firms initiated hold or neutral ratings and three initiated buys.

Bojangles’ IPO came at a time when fast casual restaurant chains are hot.

New York-based Shake Shack went public in January, and in its first day of trading, the burger chain’s stock rose more than 50 percent. Shares for Shake Shack closed Thursday at $77.44, up more than 68 percent from the closing price on its first day of trading in January.

In its IPO filing, Bojangles’, which was founded in 1977 and operates over 600 restaurants in 10 states and the District of Columbia, said it wants to expand the number of locations by 7 or 8 percent a year, mostly in markets in which it’s already concentrated.

About two-thirds of the restaurant’s locations are in the Carolinas. But recognition in adjacent markets is limited, which could mean expanding into these markets will be challenging, analysts at Barclays wrote in a recent research note.

Despite the fact that Bojangles’ has been around for almost four decades, it is still in the early stages of its growth story, Rutledge said.

On Thursday the company said it plans to open between 50 and 57 restaurants in 2015, which will include 22 to 25 company-operated restaurants and 28 to 32 franchised locations.

Rutledge said the excitement for the company’s brand can best be described by the company’s tagline: “It’s Bo Time.”

Chaney: 704-358-5197; Twitter: @sechaney

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