Fogo de Chao (FOGO 13.25, 0.00) reported better than expected results for the fourth quarter.
The restaurant chain reported above-consensus earnings of $0.28 per share on a 4.4% year-over-year increase in revenue to $80.90 million, which was also ahead of market expectations. The company was able to generate revenue growth even though comparable restaurant sales declined 1.0% year-over-year. For the full year, the company's comparable restaurant sales declined 0.6%.
Fogo de Chao's revenue growth rate was fueled by new restaurant openings in the past 18 months and positive foreign exchange translations. This was partially offset by an extra week of sales in 2015.
Comparable restaurant traffic rose 0.5% in 2016, representing the third consecutive year of traffic gains.
Fourth quarter U.S. restaurant revenue grew 5.0% to $68.60 million, mostly due to restaurant openings. In Brazil, fourth quarter restaurant revenue was little changed year-over-year at $12.20 million. Favorable foreign exchange translations were offset by a 6.9% year-over-year decline in comparable restaurant sales.
Fogo de Chao plans to continue expanding with plans for seven total restaurant openings in the U.S. in 2017. One location was opened in Tysons, Virginia in January while another was opened in Dallas in February. Three additional company-owned stores are expected to open by year's end and the company is negotiating letters of intent for company-owned locations to be opened in 2017 and 2018.
Going forward, the company expects to generate full year earnings between $0.92 and $0.95 per share on revenue between $315 million and $320 million. This is roughly in line with current market expectations.