Bojangles Profit Falls as IPO Swells Costs

Southeastern chicken restaurant chain Bojangles Inc.'s first-quarter profit fell, as the company recorded higher costs that were swollen by its May initial public offering.

The Charlotte, N.C., chain, nonetheless, hit the top end of its guidance, with sales at locations open for at least 15 months increasing 7.9%, compared with 1.7% growth a year earlier.

It was the 20th consecutive quarter of sales growth at established locations, the company said.

For the year, Bojangles projects revenue of $480 million to $487 million, compared with the consensus of $486.6 million, with sales at established locations improving by the low- to mid-single digits.

Overall, for the 13 weeks ended March 29, it reported a profit of $3.4 million, down from $4.99 million a year earlier. On a per-share basis, the company reported pro forma net income of 9 cents, down from 13 cents, or 17 cents compared with 14 cents a year earlier, excluding items.

Revenue rose 19% to $114.6 million.

Analysts surveyed by Thomson Reuters projected profit of 15 cents a share on revenue of $114 million in sales.

Shares, which opened May 8 at $26.55 and set a high of $28.45 six days later, rose 2% to $26.44 in late trading. Bojangles priced its IPO at $19 a share.

Founded in 1977, the quick-serve chain, known as Bojangles' Famous Chicken 'n Biscuits, has expanded to 635 restaurants as of May 29 from 581 units a year earlier. Bojangles said it plans to add 50 to 57 restaurants this year.

Bojangles has made its all-day breakfast menu a key part of its pitch, noting it makes most of its sales before 11 a.m.

Write to Maria Armental at [e-mail]

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