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 A leading quick-service restaurant chain AFC Enterprises Inc. recently declared its preliminary fourth-quarter and full year 2012 results.

The company projects its adjusted earnings per share for the full year of 2012 to be within $1.23-$1.24, up from 99 cents in 2011 as well from the previously provided guidance range of $1.19-$1.21. The Zacks Consensus Estimate for 2012 is $1.24 per share.

The earnings in 2012 are likely to be driven by the company’s high revenue growth in the fourth-quarter 2012. Moreover, the company’s expansion initiatives are also expected to help augmenting the earnings further.

Quarter Highlights

In the fourth quarter, AFC Enterprises' global comps spiked 6.0% compared with 5.8% in the year-ago quarter. The solid improvement in comps resulted from a 6.4% upside in domestic same-store sales and 3.5% gain in the International Franchised same-store sales.

On the domestic front, franchised restaurant posted a 6.3% rise in comps versus 6.2% in the year ago quarter. The company-owned restaurants’ comps were up 7.8% compared with a decline of 1.5% in the year earlier quarter.

As per the guidance, the company also expects that its global comparable store sales will grow by 6.8% in 2012 up from 3.1% in 2011 as well from the company’s previously provided range of 6% to 6.5%.

The domestic same-store sales surged 7.5% from 3.0% in 2011 whereas International Franchised same-store sales were 2.4% down from 3.3% in 2011.

The company has projected that in 2012, general and administrative costs will be $67.6 million (3% of system-wide sales) which is within the company’s previous guidance range of $67 million - 68 million.

Store Update

AFC Enterprises, which operates and franchises Popeye’s restaurants, recently, declared that during fourth-quarter 2012 it has unveiled 42 restaurants domestically and 20 internationally.

In 2012, the company  launched 141 restaurants. The number of restaurant openings was within management’s guidance range of 140 - 150. The company also permanently shut down 75 units in 2012.

In addition, AFC Enterprises’ projected net unit growth of 66 restaurants in 2012 was at the lower end of the company’s guidance range of 65-85 net restaurants.

At the end of the fourth quarter, the company had 2,104 units out of which 45 were domestic company-owned outlets, 1,634 franchised domestic units and 425 franchised international units.

Management announced that it has achieved significant growth in 2012, which will help it attain noteworthy improvement in its Popeyes' business going forward.

AFC Enterprises currently retains a Zacks Rank #2 (Buy). Restaurateurs, which are also expected to perform well, include Bob Evans Farms, Inc. (BOBE - Snapshot Report), The Cheesecake Factory Incorporated (CAKE - Analyst Report) and Burger King Worldwide, Inc. (BKW - Analyst Report). All these stocks carry a Zacks Rank #2 (Buy).

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