Q1 2021 Fiesta Restaurant Group Inc Earnings Call
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I would now like to turn the conference over to Raphael gross managing director at ICR. Please go ahead.
Thank you, yes, the restaurant group's first quarter 2021 earnings release was issued after the market close today. If you have not already accessed at that can be found on the company's website www dot <unk> dot com under at the Investor Relations section before we begin I'd like to inform.
And that during the call today the company will make various statements that are not based on historical information. These forward looking statements include without limitation statements regarding the company's future financial position and results of operations business strategy budget projected costs and plans and objectives of management for future.
Actual outcomes and results may differ materially less of expressed or forecasted and such forward looking statements and the company can give no assurance that such forward looking statements will prove to be correct important factors that could cause actual results to differ materially from those expressed or implied by the <unk>.
Forward looking statements can be found and the company's SEC filings. Please note that during today's conference call certain non-GAAP financial measures will be discussed, which the company believes can be useful and evaluating its performance and.
Any discussion of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and a reconciliation to comparable GAAP measures is available and the company's earnings release on the call with me today are president and Chief Executive Officer, Richard Stockinger and Chief.
Actual officer, Dirk Montgomery, and now I'd like to turn the call over to rich.
Thank you Amy.
I'd first like to thank all of the investors and other participants on the call today for their continued support.
At covering two topics today.
This update including an overview of first quarter results and an update on the status of our 2021 strategic priorities Patti Lopez, our chief experience officer at will provide a digital platform initiatives update followed by Dirk wrapping up with a financial update.
Overall, we are pleased with our first quarter sales and profit after considering the impact of winter storm Yuri on February sales, which negatively affected the entire state of Texas for multiple weeks.
Both of our brands showed continued positive momentum and sales trends during the first quarter of 2021 compared to the fourth quarter of 2020, which continued in April.
Toiled tropical and first quarter 2021 comp sales improved to positive four 3% compared to 2021 2020.
And were three 3% down versus the first quarter of 2019.
Taco Cabana first quarter comp sales improved to minus four 3% compared to the first quarter of 2020.
The negative impact of winter storm Yuri on Taco Cabana first quarter comp sales was estimated at a negative 480 basis points.
And so far in May and both brands are showing encouraging trends early in the month versus 2019.
In addition, Taco Cabana had the second highest cinco de Mayo holiday sales per unit in 10 years with sales growth above both the 2020 and 'twenty and 19 Cinco de Mayo holiday results.
We continue to maintain strong margins at both brands.
First quarter of 2021 income from operations was $1 $3 million compared to a loss from operations and the first quarter of 2012 Consol.
Consolidated adjusted EBITDA, a non-GAAP measure was $12 9 million or eight 9% of total revenues.
Which includes the estimated negative impact of winter storm Yuri of approximately one $9 million.
We grew our first quarter consolidated adjusted EBITDA of 63 per cent compared to the first quarter of 2020.
We estimate that winter storm euro negatively impacted consolidated adjusted EBITDA as a percentage of total revenues by approximately 110 basis points.
Both brands grew restaurant level adjusted EBITDA, a non-GAAP measure as a percentage of sales to above first quarter 2020 levels.
Pollo tropical group of restaurant level margin from 18% and the first quarter of 2020 to 21, 4% and the first quarter of 2021 Taco.
Taco Cabana restaurant level margin from eight 8% and first quarter 2022 of 11, 3% and the first quarter of 2021, which includes the estimated negative impact of winter storm here of approximately 270 basis points.
We also continued our positive growth and cash flow during the first quarter, increasing our cash balance and further reducing the level of net debt compared to the fourth quarter levels.
Dirk will provide additional details regarding first quarter results and our outlook for the remainder of 2021 as part of his prepared comments.
Our operations teams continue to do a great job adjusting to evolving market conditions.
The winter storm was a challenge for of Taco Cabana team with 125 units being impacted at varying levels of all Taco units were opened and running by early March and we are and the process of now filing insurance claims and replacing landscaping that was damaged.
As you all May know our industry has been facing staffing available at availability issues since late March.
And we have put in place the following plans to ensure that we have adequate staffing and our restaurants.
Beginning in May we are paying an additional one dollar per hour to hour hourly operations team members at both brands.
We also raised the minimum hourly rate at pollo to $10 per hour accelerating the change required on the state of Florida minimum wage legislation legislation.
We are also a value evaluating further unit specific actions needed based on competitive wage rate benchmarking by trade areas.
In addition to maximize retention of special bonus incentive for the second quarter was created for all operations management team members that is above our normal bonus target.
From a recruiting perspective, we have improved our processes to be more streamlined to reduce hiring cycle times and also have added short term third party resources to identify and qualify more candidates.
And at both brands, we were implementing operations simplification plans to reduce complexity, including menu and promotions simplification and guidelines from maintaining service and units that have staffing shortages.
And the labor shortage has resulted in reduced hours at select locations.
Although the overall reduction and unit opening hours has not yet reached and material level.
We will continue to evaluate additional retention strategies and hourly wage compensation levels going forward to ensure we can adequately staff our restaurants.
Nearly all of our dining rooms were opened by the end of March with Taco Cabana dining room openings slowed by the winter storm repairs.
We believe that we can offset the cost impact of increased wage rates through selective price increases, while still maintaining attractive value perceptions with our customers.
This is based on internal research and research conducted by our outside pricing analytics consultants.
Over the last three years, we believe that our brands have taken lower price increases than our peer group in April we increased prices by 3% at Pollo tropical and 2% at Taco Cabana and plan to take additional pricing action as needed and late summer and response to cost pressures.
Now I'd like to provide and update on our strategic priorities.
As I mentioned and the fourth quarter, our strategic priorities are as follows one and concentrate on accelerating growth and non dine in channels and improving the guest experience across all channels to better enable our customers to enjoy our brands wherever and whenever they choose.
And.
Enhance our digital platform and make improvements and ease of use and speed of service for off premise, including enhanced digital drive through experience curbside.
<unk> technology enhancements to improve speed and customization of the consumer experience and continued improvements and our loyalty platform that drive incremental sales from loyalty members and.
Three continue refining the pollo tropical brand essence and preparation for expansion in existing.
And new markets.
We made good progress growing non Diane and channels during the first quarter.
And at Pollo, tropical and we generated drive through growth of 4% and delivery and online channel growth of at least 21% and those channels compared to the fourth quarter of 2020.
Coiled Tropic, how first quarter 2021 delivery sales penetration exceeded 10% of total sales the highest penetration to date.
Oil generated strong delivery sales through promotions tied to high delivery volumes occasions during the quarter, including the Super Bowl and March Madness.
First quarter Taco Cabana sales trends by channel are difficult to compare to prior quarters due to the impact of the winter store.
Fight the winter storm impact first quarter 2021 delivery sales channels more than doubled compared to 2020, and Taco Cabana generated first quarter 2021 online and catering growth above first quarter 2020, and 2019 levels.
We are also and the final stages of implementing liquor delivery sales with a leading regional delivery service provider favor, which we expect to launch and the second quarter and believe is an opportunity for delivery channel sales growth.
Regarding our digital platform over the first quarter, we continued to make investments to enhance our digital platform and improve the customer experience and those efforts will continue throughout the remainder of 'twenty one.
Patty will provide additional details on our digital platform plans and progress in a moment.
Finally, we made good progress on our third strategic priority, which is to continue refining the pollo tropical brand essence, and preparation for expansion and existing and new markets for both company owned and franchise locations as I mentioned on the call last quarter, we can.
Pleated qualitative research and brand positioning and our and the final stages of quantitative research completions.
The results of this research will allow us to develop and enhanced brand positioning.
And we will provide a clear brand strategy.
For both existing and new markets.
The development of new restaurants will incorporate what we have learned during COVID-19, pandemic and our market research.
As we identify key restaurant design and brand positioning changes, we intend to test them selectively and 2021 remodels to obtain consumer feedback and.
And to inform future new unit designs.
We are planning for to eight Remodels in 2021 that will incorporate new design and operating model enhancements.
We incorporated preliminary design features into a remodel and our first 2021 remodel.
At the Western Florida location, which opened just recently.
The design enhancements include updated preliminary interior and exterior design features that reflect the preliminary research results on brand image with fewer dining room seats of second make line to improve speed of service and enhanced mobile pickup capabilities.
Although the western unit.
And just recently reopened we are already receiving very positive feedback from our customers.
In summary.
And we will continue to concentrate on non dine and trade channels to match, the evolving changes and consumer behavior and.
And we will focus on creating a great guest experience across all channels.
Our investments and our digital platform will continue throughout 2021.
We are optimistic about the remainder of 2021 and believe that our growth initiatives will continue to build momentum and accelerate sales.
Now Patty Lopez scale will provide a bit more color on our digital platform strategies and progress Patti. Thanks, Rich our golden the digital transformation of our brands is to provide our guests a frictionless omnichannel experience and.
As Richard mentioned in his comments our digital strategy focuses on experienced customization that we believe will drive growth across all channels. We continue to improve the pollo tropical drive to infrastructure.
During the first quarter, completing Wi Fi signal extension work that will allow our drive through mobile ordering devices to work further back in the dry flow carlin's during peak times, allowing for greater throughput and we are also and the final stages of upgrading all units to faster drive new payment processing devices that reduced estimated <unk>.
<unk> from 25 seconds to less than five seconds per transaction, we intend to rollout similar improvements going forward at Taco Cabana.
We have made progress on our efforts during the first quarter to at Jones, Geo fencing technology capability for curbside pickup to improve speed of service and ease of use we started to test of the Geo fencing technology day in the first quarter and plan to continue implementation. After we evaluate the test results of our successful pilot program partner.
And once again with the experienced consultancy firm bottle rocket. We also began the design phase of our enhanced pricing digital platform in April which will continue through the second quarter. We're very excited about the capabilities from improved order accuracy and speed of service and greater levels of personalized marketing and additional opportunities.
<unk> to showcase our unique brand attributes at this platform will enable and addition to creating a stable and scalable environment and increased order value and minimum viable products. Our MVP targeted for the first phase of the digital try to transformation will give us more insight into who our guests are and how they use this channel.
We hope to begin of test of the drive through digital platform sometime in the second half of 2021, we continue to iterate on what and how we communicate with our loyalty members through our app leveraging insights to provide more personalized and relevant conversation, we see our mobile application and the future drive through experience at the core.
Components.
All of our digital platform, which will allow for enhanced innovation going forward.
<unk>, who will provide the financial update and closing comments.
Thank you Patti and good afternoon, everyone I'll start by reviewing our first quarter results and then provide you with an update on our outlook for the remainder of 2021.
We were pleased with our first quarter performance in terms of sales profit growth and margin improvement absent the impact of winter storm Yuri.
As a reminder of the COVID-19 pandemic began to have a significant impact on pollo tropical and Taco Cabana sales trends beginning the week of March 16th 2020, and create some level of non comparable <unk> of current year results with prior years as a result, we will be providing commentary this year for many key measures comparing current year.
<unk> to both 2020 and 2019.
Total revenues decreased one 3% to $144 7 million and the first quarter of 2021 from $146 $7 million and the first quarter of 2020.
Driven by the comparable restaurant sales decrease of Taco Cabana, which was due principally to the impact of winter storm, Yuri and restaurant closures, partially offset by the comparable restaurant sales increase at Pollo tropical and.
As we noted previously our historic penetration of Dine in sales has been approximately 25% and we made very good progress offsetting the dine in sales loss through the first quarter of 2021 with strong off premise and drive store sales growth.
Our first quarter same store comp sales trend improved from the fourth quarter of 2020 levels with polo, Tropicana comps trend comp trends and proving to plus four 3% for the first quarter compared to the first quarter of 2020 and minus three 3% compared to the first quarter of 2019.
Taco Cabana first quarter same store comp sales were minus four 3% compared to the first quarter of 2020.
As rich noted the estimated negative impact of of winter storm Yuri on Taco Cabana comparable restaurant sales was approximately 480 basis points.
Taco Cabana and 2021 comparable restaurant sales trends for March April and May to date versus the first quarter of 2019, all showed acceleration above fourth quarter of 2020 comp sales trends versus 2019.
First quarter of 2021 consolidated net loss was $2 1 million or <unk> <unk> per diluted share and included approximately <unk> <unk> per diluted share of negative impact primarily from closed restaurant rent charges and and out of period tax adjustment.
This compares to a net loss and the first quarter of 2020 of seven 3 million of 29 per diluted share, including a 25 per diluted share negative impact primarily from impairment charges and closed restaurant rent and other charges.
Provision for income taxes, and the first quarter of 2021 includes a onetime $1 5 million out of period adjustment related to tax depreciation and certain assets placed into service several years prior to the formation of Fiesta and 2011 <unk>.
The impact on the provision for income taxes is primarily related to an increase and evaluation allowance on our deferred income tax assets as well as the effect of a decrease and the federal corporate income tax rate and 2017 on our deferred tax assets and liabilities.
And on an adjusted basis first quarter of 2021 consolidated net income was <unk> 2 million of <unk> <unk> per diluted share compared to an adjusted net loss of $2 9 million or a loss of 11 cents per diluted share and the first quarter of 2020.
Please see the non-GAAP reconciliation table in our earnings release for more details.
Consolidated adjusted EBITDA, and non-GAAP measure increased 63% versus last year at $12 9 million. This.
This was the third quarter of consolidated adjusted EBITDA growth above prior year. Despite negative same store comp sales at Taco cabana, including the impact of of Winter Storm Yuri.
And both brands grew their adjusted EBITDA margins and the first quarter above 2020 levels.
The estimated negative impact of winter storm urea on a consolidated adjusted on consolidated adjusted EBITDA was approximately $1 9 million or 110 margin basis points as a percentage of total revenues.
Now turning to our individual brands.
And at point of traffic, how first quarter comparable restaurant sales increased four 3%.
And the first quarter, the first quarter improvement resulted from of nine 1% decrease and comparable restaurant transactions and at three 4% increase and the net income in the net impact of product channel mix and pricing.
The increase and product channel mix and pricing was driven primarily by increases and delivery online and drive through average check and sales channel penetration and menu price increases of one 2%.
Regarding sales trends by channel and <unk> dine in and counter takeout comparable restaurant sales decreased to 39% from the first quarter of 2020 to the first quarter of 2021, due primarily to the negative impact of the pandemic and dine in traffic and closures of our dining rooms during part of the first quarter of 2021 day.
Kris and dine and channel sales was offset by strong off premise channel growth.
During the first quarter of 2021 point of generated drive through growth of 4% and delivery and online channel growth of at least 21% and those channels compared to the fourth quarter of 2020.
We of Tropic, how first quarter of 2021 delivery sales penetration exceeded 10% of total sales for the first time and that's the highest penetration and delivery we've had to date.
Turning to the brand profitability for the first quarter Pollo restaurant level adjusted EBITDA margins of non-GAAP measure continue to be strong with first quarter restaurant level adjusted EBITDA margins of 21, 4% and 2021 compared to 18% and 2020 and 23, 3% and 2019.
As a percentage of restaurant sales period, <unk> experienced lower first quarter 2021 cost of sales of 31, 1% compared to 32, 4% and 2020 due to operating efficiencies lower promotions and discounts and price increases, partially offset by lower rebates and discounts from suppliers.
Restaurant wages as a percentage of net sales also declined from 24, 5% and the first quarter of 2020 to 23, 2% and 2021% driven.
Driven primarily by labor efficiencies and lower medical benefit costs, partially offset by higher incentive bonuses.
<unk> did an exceptional job managing food costs and labor to improve restaurant level, adjusted EBITDA margins compared to last year.
Other restaurant operating expenses increase and the first quarter compared to 2020, due primarily to increased delivery service provider fees, partially offset by lower utilities costs.
Ren and the first quarter increased compared to 2020, due primarily to the impact of sale leaseback transactions and lease renewals at higher rates.
We also incurred incremental costs related to COVID-19 of <unk> $3 million during the first quarter, including corn team pay and costs related to COVID-19 testing.
Due to the severe winter storm that impacted Texas from February 14th through February 21, 2021, Taco Cabana February revenue and profit were negatively impacted compared to 2020 results. All units were closed for a number of days during that period with significant reductions and traffic due to poor road conditions.
We estimate winter storm Euro negatively impacted first quarter of 2021 comparable restaurant sales by 480 basis points and adjusted EBITDA by $1 9 million.
And at Taco Cabana first quarter of 2021 comparable restaurant sales decreased four 3% versus 2020. The decrease in comparable restaurant sales resulted from a 15, 9% decrease and comparable restaurant transactions and a 11 six increase in the net impact of of product channel mix and price.
<unk>.
The increase and product channel mix and pricing was driven primarily by increases and drive through and delivery sales channel penetration.
Growth and average check for drive through versus last year and menu price increases of two 1%.
From a sales by channel perspective, Taco Cabana dining and counter takeout comparable restaurant sales decreased 64% from the first quarter of 2020 to the first quarter of 2021 due to the negative impact of the pandemic on dine in traffic and closures of our dining rooms during most of the quarter.
The decrease and dine and chip channel sales was partially offset by significant off premise channel growth.
Taco is delivery business and the first quarter of 2021 was more than two times. The first quarter of 2020 sales driven by the increase and the number of delivery service providers that began late in the first quarter of 2020.
The online and catering channels also realized revenue growth and the first quarter of 2021 versus the first quarter of 2020.
Sequential trends from the fourth quarter of 2020 to the first quarter of 2021 were negatively impacted by the winter storm. However, after excluding February the average weekly sales by channel and the first quarter of 2021 showed growth and the drive through and delivery channels compared to the fourth quarter of 2020 average.
And weekly sales.
Turning to the brand's profitability for the first quarter Taco Cabana continued to improve margins and dollar profits and the first quarter compared to the first quarter of 2020.
Taco restaurant level, adjusted EBITDA margins and non-GAAP measure grew from eight 8% and 2020 to 11, 3% and 2021, including the negative impact of winter storm Yuri.
The estimated negative impact of winter storm urea and Taco Cabana first quarter 2021, adjusted EBITDA margins was negative 270 basis points.
As a percentage of restaurant sales Taco Cabana experienced lower first quarter of cost of sales of 28% compared to 37% and 2020 due to lower commodity costs, and operating efficiencies and lower promotions and discounts and price increases, partially offset by sales mix and lower rebates from suppliers.
Restaurant wages as a percentage of net sales also declined from 32, 2% and the first quarter of 2020 to 31, 4% and 2021, driven primarily by labor efficiencies that were partially offset by higher incentive bonus and medical costs.
Despite lower comp sales Taco Cabana continued to improve efficiency at a sustainable level and managing food costs and labor to improve restaurant level adjusted EBITDA margins compared to last year.
Other restaurant operating expenses increased as a percentage of sales and the first quarter compared to 2020, due primarily to increased delivery service provider fees and repair costs due to winter storm Yuri.
Offset by lower other repair and maintenance costs.
Rent and the first quarter increased compared to 2020, due primarily to the impact of lease renewals at higher rates and sale leaseback transactions. We also incurred incremental costs related to COVID-19, and <unk> 2 million during the first quarter, including quarantine PE and costs related to COVID-19 testing.
Turning now to cash flow related comments and the first quarter, our cash balance growth from the fourth quarter balance of $50 million at January three 2000 $21 million to $59 million at the end of the first quarter of 2021 net debt of non-GAAP financial measure decreased from $23 3 million at the end of the fourth quarter.
<unk> to $14 2 million at the end of the first quarter.
During the first quarter, we sold two properties and sale leaseback transactions for total proceeds of $3 1 million and net gains of <unk> 3 million and the first quarter of 2021 as you may recall last year. We had 16 owned properties that we marketed for outright sale or sale leaseback transactions through the end of the first quarter of 2021, we had sold.
15 of the 16 properties and expect to close and the one remaining property during the second quarter.
Although there can be no assurances that at transaction will occur.
Total capital expenditures for the first quarter of 2021 were $3 1 million, which included $2 million for maintenance and <unk> 5 million for technology, and corporate and <unk> 7 million for remodeling and development.
I'll close with a few comments on our outlook for the remainder of 2021.
We are encouraged at both brands appear to be gaining momentum during the second quarter to date compared to first quarter trends.
<unk> is trending towards flat sales versus 2019, and Taco Cabana is off to a great start in may with the best Cinco de Mayo holiday single day sales and sales for the holiday week that the brand has seen since 2017.
From a margin perspective, rich mentioned the labor cost pressure, we are seeing and our action plans.
Based on internal analysis as well as input from our pricing analytics consultants. We believe that we can take additional pricing action if needed to offset cost pressure to maintain margins at historic levels, while still keeping the strong value perceptions of our customers have for both brands.
<unk> food costs are expected to remain stable.
Through the remainder of 2021 based on current supply commitments that we have in place for calendar 2021 across key commodities.
Capital expenditures in 2021 are still expected to be and the range of $33 million to $38 million with the increase compared to 2020 levels, primarily driven by investments and our digital platforms, including digital drive through upgrades.
In closing we believe both brands are entering the second quarter of 2021 with topline momentum and we believe our revenue building strategies and off premise channels and investments and our digital platform will et cetera, and accelerate sales and the remainder of the year.
Thank you for listening and we will now open up the call for questions operator.
Thank you.
We'll now begin the question and answer session.
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Our first question comes from James Rutherford of Stephens incorporated.
Go ahead.
And thank you and good afternoon, and hope you all are doing well.
And I wanted to start off on yeah, I wanted to start off on the split of sales by channel I. Appreciate you laying it out and that detail and it's clear you've continued to see drive thru delivery and mobile ordering growth.
With counter sales down and we've listened to a lot of earnings calls and the last few weeks it seems like more and more of that delivery and mobile channel, but the gains and that would be quite durable, but how do you think about the drive through versus counter sales mix and where that normalizes or any indication in recent weeks or months at gets you to kind of view and how.
Customers will use.
Your business is going forward.
Sure. So I mean, it varies a little bit by brand I think we pre COVID-19.
Front from an occasion perspective for pollo.
We we had a very large lunch occasion dining index, and we believe that that as consumers.
Consumers go back to their regular patterns of behavior, we believe at all.
Ultimately that dine in occasion is going to return.
And we're starting to see that.
And whether at the level of Incrementals between drive thru and dine in and it's still pretty early.
Still difficult for us to determine whether you know how much incremental day, we're going to we're going to retain an on drive thru and.
James we're focusing a lot and that's what Patti went over on the digital side with the drive through we believe that yes at pollo, especially and the core markets. Our lunch is starting to come back.
But we also believe that the guest preferences will change in terms of will they will still want to eat at home.
And not in dining experience that we had in the past and that's why we're putting such focus on the drive through and other channels and case that never comes back we still feel we have a great opportunity to increase our sales system wide because of the efforts and the investments we're making.
And even though it's difficult to really pinpoint income true inker mentality on the point of aside from the fourth quarter of the first quarter. We saw an increase generally across all channels, so that increase and sales was.
Pretty evenly spread across most of the channels as they all more or less maintained their penetration on the Taco side, we opened at the dining rooms, a little bit later, so it's still pretty early for us to really determine how much incremental <unk> and we're going to see on the on the Taco side.
That sounds pretty encouraging on that <unk> shift you saw growth you saw across channels on.
On the Pollo restaurant level margin and because.
Moving on wages first a clarification I think you are at average hourly wage at <unk> was $9 60, and the last update.
Is that going to $10 per hour, which would be about a 4% increase by my math or is it that hourly wages across the board are going up by $1, which would be of a larger increase I just wanted to get that correct first of all.
Yes, good question.
Good question for clarification. So we had some employees that were below $10 per hour. So we're moving those employees to $10 and then we're giving all employees.
Another and extra dollar per hour and that.
Extra dollar per hour is just for the time being to get us through this labor crunch.
So the ones that were not of Perm nine.
Sorry, I apologize I interrupted you I thought it was it was cutting in and out of of a bit there.
So thats not a permanent thing youre, saying Richard.
No no, but we are going through and.
Evaluating market by market to see where we are from our wages and we'll evaluate any additional increases as we get that data.
Okay, but that dollar per is temporary.
And then there was at 3% price increase taken in April.
In addition to the one 2% price that was already in place and the first quarters of going forward, it's more like 4% four 2% price.
That's correct.
Correct Okay.
Okay and at a general level price increases that we.
Okay.
I was just going to add at the price increases that we just took we believe will offset the cost of the changes that we've made to date, even though some of those of short term as rich said.
Yeah that was exactly what my next question was going to be so.
Thanks for that.
And then just two more quick ones and I'll turn it over but on commodities did I hear correctly that you expect your commodity costs to be flat through the year because of locking in the prices.
Across the board.
Correct. So for food for key commodity categories, we are locked in and we're not locked in and some other categories at or less materials such as packaging.
So we are seeing some pressure I think like most other players in some of those areas, but on the commodity front and we expect stable costs.
Okay great.
Great and last one thanks for giving us much time here, but on the Remodels planned for the year are those changes to kitchen and design operations and.
Focused on improving the performance within your existing markets or are those more changes made at the mind towards testing out and to see what might work outside of Florida.
Yes, it's really both I mean, it's and it's definitely in existing markets as rich said.
Whereas we as we have identified remodels of that we'd like to do we want to try to incorporate some of the new elements from our research to try to get an early read on those elements before we'd start opening new stores.
Thanks for all of the tax I'll turn it over.
Thanks, James Thanks, James.
Our next question comes from Joshua long from Piper Sandler. Please go ahead.
Great. Thanks for taking the question and gentlemen, thanks, so much for all of the great detail. The day I wanted to start off with a clarification understood.
Plenty of type of call in terms of getting back towards some of those I think you said 2019 levels.
And I wanted to see if you could clarify your comments and Taco Cabana and it sounded like things were moving and the right way, but I wanted to make sure I understood.
Points in terms of how how taco was performing and the quarter to day period.
Sure so.
The quarter performance was negatively impacted by winter storm Yuri.
So that and.
And that's that's this this first quarter.
So we tend to try to break at we've broken it down by month, which is why we reflected and in the press release as such.
No.
As we look from January and February end of March April May and we're definitely seeing an acceleration and the Taco brand from the levels that they were at at the beginning of the year or even back to the fourth quarter of 2020.
We are focused I think like our investment.
Stakeholders on our trend versus 19, and we're seeing.
Improvement in the trend versus 19, particularly as we headed from.
From April into May.
Okay. Thank you for that and I think previously we've talked about.
<unk> positive growth in 2021, driven in part by the growth initiatives and then.
Just overall increases across the different <unk>.
And in terms of traffic.
Consumer mobility got back to normal is that still the outlook and.
And you sort of color additional color there would be helpful.
Yes, I mean that is still the outlook and as we as we indicated in our prepared comments I mean, both brands are are are moving toward flat to 19.
With with Pollo, a little bit ahead of Taco and Pollo basically is flat to 19 at this point.
And as we said I mean, Taco had a fantastic Cinco de Mayo holiday. So may is off to a great start obviously, it's still early in may but.
They had a fantastic cinco holiday and weak.
And that puts them on a good trajectory too.
To meet or beat 19, as we head through the remainder of the year.
Okay.
Great. Thanks for that and wanted to shift over to some of the qualitative research you were doing if you could share of any of the takeaways there, perhaps and just underscores some of the learnings and some of the brand attributes and things that we've already known about the brand, but maybe it gives you a different perspective or maybe a little bit more firepower as you start to layer and some of these initiatives and.
Going forward and then.
If you could provide any sort of expected timeline or just general.
Expectations around the flow of some of that quantitative research that youre doing.
Yes, Joshua it's rich I'm not ready to publicly disclose at in terms of what the results are but we've been pretty excited about.
The results so far.
And we definitely have strong essence, especially and core but we're at analyzing not just core but also out of core and also potential new markets as what the people want and what the people want to use us for and how do they want to use us for now you can read into some of it in term.
Of where we're putting the money in terms of the digital investments and the drive through.
But we're a little early I believe though that we'll be able to discuss this definitely by the end of the year and.
And Youll start seeing and some of the newer remodels and the tests that we're doing kind of what we got out of the research, but clearly the food is the number one.
Qualitative and quantitative result is how much people love the food the freshness of the food those are the two.
Big attributes and we've worked hard to get get there and the guests are seeing and appreciating it.
Okay.
Great. Thank you.
Okay.
Thanks, Josh.
Our next question comes from Brian Vaccaro from Raymond James. Please go ahead.
Hi, Good evening I appreciate the monthly sales trends, but can you help us level set where average weekly sales volumes are for each brand and I just want to make sure. We're all at the same page trying to work through the one week of calendar shift and the two year stacks that you disclosed.
Sure.
And so.
And I'm, giving broad strokes here, but.
Overall, our average weekly sales trend sequentially from the fourth quarter for Pollo improves.
And of high single digits.
We haven't published the average weekly sales numbers, but you can.
You can get to the average sales numbers from using the information that we provided and the press release.
And interest from our excuse me from a channel perspective.
As I mentioned before we had growth across all of the channels.
In terms of Q1 average weekly sales compared to Q4, so that we were encouraged by that because we were concerned.
Like everyone else about some level of trade out across the channels.
On the Taco side.
And because of winter storm year, it's very difficult to really compare.
Average weekly sales by quarter, you almost have to look at it by by months and as I as I mentioned, we did see growth and average weekly sales in the drive thru and delivery channels.
If you exclude February.
And at Taco in Q1 versus Q4.
Alright, so and the Taco side I think that math is of little over 30000 of week for the first quarter, obviously hurt.
Winter storm here had a big impact there.
Can you help us with where we are in March and April on average weekly sales.
Okay.
We're not.
And what our view of all of this is that the reason that we're publishing comps compared to 2019 is really to try to get back to.
What we think is of.
And our comparison that that kind of takes out the impact of COVID-19.
And we're certainly willing to.
Disclose average weekly sales and consider that if thats, an important item to to the investment community, but our our thought was at least for this quarter that we would publish comp sales versus 2019 to really give us a clean look at what our true trends are against history.
Yeah.
Alright fair enough and last one from me just on G&A, what's a reasonable number to expect for this year on the G&A line.
Given all of the moving parts and I think you were at in the low $50 million range, but the other bits of work on streamlining your G&A costs, but just ballpark the G&A expectations for the year. Thank you.
Yes, I mean, I think we mentioned on the last call that we our goal is to really try to to keep G&A as a percentage of of revenue flat.
As we as we head into 'twenty, one against 20 so.
That's that's our that's our goal and I think we believe that Thats achievable.
Okay. Thanks, Brian.
Okay.
This concludes the question and answer session and today's conference call. You may disconnect. Your lines. Thank you for participating.
Supporting and have a pleasant day.
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