Popeyes: LTOs and marketing drove 1Q results
AFC Enterprises Inc., parent company of Popeyes Louisiana Kitchen, credited a continuing stream of limited time offerings, backed by solid marketing and strong operational performance for a 15.2-percent jump in profit for the first quarter.
The company reported same-store sales growth of 7.4 percent globally and 8.1 percent in the United States. Both global and domestic same-store sales rose by 3.9 percent in the first quarter of last year.
AFC chief executive Cheryl Bachelder said the April 15-ended quarter was the eighth consecutive one in which global same-store sales grew, and the sixteenth consecutive quarter in which Popeyes’ same-store sales growth outpaced its competitors in the quick-service chicken segment. In the most recent quarter, Popeyes’ same-store sales grew 380 basis points, or 3.8 percent, faster than the overall QSR chicken segment, she said.
Popeyes also has outpaced growth in the QSR category as a whole in three out of the past five quarters, AFC reported. “And in this [most recent] quarter, with plus-8 growth in the U.S., we outpaced the big burger guys by a nice margin,” Bachelder told NRN in a separate interview.
AFC’s net income for the quarter rose to $8.3 million from $7.2 million in the year-earlier quarter. Total revenue rose nearly 13 percent to $52.8 million from $46.8 million in the year-earlier quarter.
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Bachelder attributed the growth largely to strong marketing and to limited-time offers that were performing well, including month-long specials in the past quarter that featured garlic-pepper Wicked Chick’n and Butterfly Shrimp.
Popeyes’ chief global brand officer, Richard Lynch, told NRN that, with major national marketing campaigns underway promoting those offers, he also was pursuing a digital strategy through social media.
“I’m not sure anybody can demonstrate that digital drives traffic, but it certainly connects a customer to your brand,” he said.
During this past quarter, Popeyes hired a digital agency to develop a strategy and launch the chain’s first social media campaign in the form of the Mood Wing app. The app, which can be accessed through the Popeyes website, Facebook or Twitter, measures users’ mood based on recent social media activity and tells them their level of “spiciness.” Users also are given a free song from Spotify.
That campaign is running nationally behind a promotion of Popeyes’ Bonafide Chicken, and is intended to underscore the fact that Popeyes serves chicken for any mood. “We’re known for our spicy chicken, but a remarkably high percentage of our chicken is mild,” Lynch said.
Lynch said Popeyes would launch its summertime campaign on Monday, promoting a return of the chain’s popular Rip’n Chick’n — a whole batter-fried chicken breast cut partially into strips, with the base intact so customers can rip off pieces — along with the Summer of Peach, featuring peach pie and peach iced tea. The latter is an extension of the chain’s cane sweet tea that was launched two years ago.
Atlanta-based AFC Enterprises operates 40 Popeyes restaurants and franchises an additional 2,004, of which 1,589 are in the United States.