Losses for the parent of Taco Cabana and Pollo Tropical deepened to a net of $8.5 million for the third quarter, reflecting traffic drops at the two brands of 14.3% and 13.1%, respectively.
Fiesta Restaurant Group said sales and guest counts at both chains had been improving until hurricanes Harvey and Irma struck in late August and early September. The chains finished the quarter with same-store sales declines of 12.6% for Taco Cabana and 10.9% for Pollo Tropical. Management attributed 5.5 to 6.5 points of the decline at Pollo Tropical and 2 to 3 points of the slide at Taco Cabana to the impact of weather.
Overall, revenues fell 12.9%, to $158.7 million.
The quick-service franchisor reported a net loss of $4.5 million for the year-ago quarter.
Management noted a number of initiatives have been undertaken to revive the brands, which Fiesta had earlier tried unsuccessfully to sell. Those moves include appointing new presidents for each brand—Chuck Locke at Taco Cabana and Danny Meisenheimer at Pollo Tropical—and showcasing new menu options. Chefs were added at the regional level to enhance food quality, and digital menu boards are being rolled out across both systems, the company said.
Much of the chains’ sales problems were attributed to the hurricanes. Nearly 200 restaurants of the dual systems’ 356 units were closed by the storms, and management decided to permanently shutter six Pollo Tropicals in Texas.
In addition to the bad weather, older stores’ sales were hurt by the openings of newer stores competing for the same customers, management said.
“After the temporary closing of all our Pollo Tropical restaurants in Florida and Atlanta due to the storms, we are pleased that sales are beginning to approach pre-hurricane comparable levels,” Fiesta CEO Richard Stockinger said in a statement.
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