Sales appear to be rebounding for Pollo Tropical and Taco Cabana, according to earnings released by parent company Fiesta Restaurant Group late Thursday.
For the two weeks that ended on Sunday, same-store sales fell 12.2% at Pollo Tropical and declined 13.4% at Taco Cabana. That’s up considerably from Q2 overall, in which same-store sales tumbled 31.6% at Pollo Tropical and 19.2% at Taco Cabana.
The company’s stock was up more than 11% Friday in early trading on the news.
“We are very encouraged by the significant sequential improvement in comparable restaurant sales at both brands in the second quarter, which has continued into the third quarter,” Fiesta President and CEO Richard Stockinger said in a statement. “These improving trends have come despite the fact that we are operating in two of the most challenged states in terms of COVID and economic conditions, Florida and Texas.”
The Dallas-based company on Sunday decided to close all of its dining rooms “until further notice” to ensure the safety of workers and guests.
“We will continue to operate our restaurants for drive-thru, delivery and pick up, and we are accelerating efforts to better enable our customers to enjoy our brands safely and conveniently across all channels—whenever and wherever they choose,” Stockinger said.
The company also announced a retooling of its credit facility covenants to provide it more of a cushion during this challenging time. For the rest of the year, the company will only have to meet a minimum liquidity target to abide by its covenants.
Fiesta currently had $101.6 million in cash on hand as of June 28, up from $75 million in April. The company had $48.4 million in net revolver debt at the end of Q2.
Off-premise alcohol sales had previously boosted Taco Cabana, helping it to its most successful Cinco de Mayo in five years, the chain said in May. Fiesta had previously blamed slow sales at Pollo Tropical on harsh economic conditions in South Florida, announcing plans to focus on value-based promotions.
The company will hold a call with analysts on August 5 to review its Q2 earnings.
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