Del Taco (TACO) showed that restaurant sales don't have to be weak despite the pressure in the sector.
- Reports Q3 (Sep) earnings of $0.13 per share, $0.01 better than the Capital IQ Consensus of $0.12; revenues rose 27.3% year/year to $104.42 mln vs the $101.61 mln Capital IQ Consensus.
- Co issues guidance for FY16, reaffirms prior EPS guidance of $0.53-0.56 vs. $0.55 Capital IQ Consensus Estimate; sees FY16 revs of $446-449 mln vs. $446.8 mln Capital IQ Consensus Estimate and vs prior guidance of $439-449 mln. System-wide same store sales is expected to grow at the high end of the previous 2.5% to 4.5% guidance range.
- System-wide comparable restaurant sales in Q3 grew +6.7% and company-operated comparable restaurant sales grew +7.1%.
As far as Del Taco, the stock is difficult to value not knowing how the company will operate in a growth environment. At about 6.5x EBITDA estimates of $70 million, the stock could have some value.
Disclosure: No position