LONDON, UK / ACCESSWIRE / October 17, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Del Frisco's Restaurant Group, Inc. (NASDAQ: DFRG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=DFRG, following the Company's reporting of its third quarter fiscal 2017 operating results on October 13, 2017. The owner and operator of the Del Frisco's Double Eagle Steak House, Sullivan's Steakhouse, and Del Frisco's Grille restaurant concepts reported a 2.7% gain in revenue on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the third quarter ended September 05, 2017, Del Frisco's consolidated revenues increased 2.7% to $73.3 million from $71.4 million in Q3 FY16. The Company's total net operating weeks increased to 630 from 607. Del Frisco's revenue topped analysts' estimates of $73.1 million.

For Q3 FY17, Del Frisco's total comparable restaurant sales decreased 4.0%. Excluding the elimination of lunch operating hours at selected Sullivan's Steakhouse locations and the impact of Hurricane Harvey, total comparable restaurant sales decreased 3.2%.

During Q3 FY17, Del Frisco's general and administrative (G&A) costs increased to $6.6 million from $5.4 million in Q3 FY16. As a percentage of consolidated revenues, G&A costs increased to 9.0% in the reported quarter from 7.6% in the year-ago corresponding period.

Del Frisco's GAAP net loss was $1.8 million, or $0.08 per diluted share, in Q3 FY17 compared to GAAP net income of $0.8 million, or $0.03 per diluted share, in Q3 FY16. The Company's adjusted net loss came in at $0.6 million, or $0.03 per diluted share, in the reported quarter compared to adjusted net income of $0.9 million, or $0.04 per diluted share, in the prior year's same quarter. The Company's reported numbers fell short of Wall Street's estimates for a loss of $0.02 per share.

Del Frisco's stated that the impact of Hurricane Harvey on Q3 FY17 is estimated to negatively impact financial results by approximately $0.01 per diluted share on an adjusted basis in the reported quarter as the Company lost 17 operating days across three restaurants in the Houston area.

For Q3 FY17, Del Frisco's restaurant-level earnings before interest, tax, depreciation, and amortization (EBITDA) fell 12.3% to $10.7 million on a y-o-y basis. As a percentage of consolidated revenues, restaurant-level EBITDA decreased to 14.6% from 17.1% in the year-ago same period.

Corporate Headquarters Relocation

Del Frisco's announced that in November 2017 the Company will be moving approximately 60 restaurant-support-center employees from its current headquarters in Southlake, Texas to a 31,450-square-foot facility in the Cypress Waters development in Irving, Texas that formerly served as the headquarters for the Cheddar's restaurant chain. The Company noted that the property better aligns with its growth plans and contains a large test kitchen.

Change to Reporting Calendar

Del Frisco's announced that effective with the onset of the fiscal year 2018, the Company will be utilizing a reporting calendar comprised of four equal quarters of 13 weeks, other than in 53-week years, in which the fourth quarter would contain 14 weeks. The change in reporting calendar will have no impact on the year-end date for any fiscal year. The fiscal year 2018 will be a 52-week period ending on December 25, 2018.

Outlook

For FY17, Del Frisco's is forecasting comparable restaurant sales in the range of -2% to -1%. The Company is estimating cost of sales of 28.0% to 28.4% of consolidated revenues and restaurant-level EBITDA of 20.5% to 21.0% of consolidated revenues. Del Frisco's is estimating gross capital expenditures between $28 million to $30 million.

For FY17, Del Frisco's is expecting annual adjusted net income per diluted share of $0.76 to $0.80 excluding hurricane impacts and $0.73 to $0.78 including hurricane impacts.

Restaurant Development

During Q3 FY17, Del Frisco's opened a Del Frisco's Grille in downtown New York City. For FY18, the Company is forecasting to open five to seven restaurants, consisting of at least three Del Frisco's Double Eagle Steak Houses and two Del Frisco's Grilles.

Del Frisco's noted that it has signed leases for Del Frisco's Double Eagle Steak Houses in Atlanta, Georgia and Boston, Massachusetts and expects to open both restaurants during Q3 FY18. The Company also expects to open one to two additional Double Eagles in Q4 FY18.

The Company noted that the Del Frisco's Grille in Westwood, Massachusetts is currently under construction and is expected to open towards the end of Q1 FY18. Del Frisco's has also signed lease for a Del Frisco's Grille in Philadelphia, Pennsylvania which it expects to open during Q4 FY18. Additionally, the Company is working on a lease for one further Grille opening in Q4 FY18.

Del Frisco's noted that it is negotiating a lease for a Sullivan's Steakhouse in Dallas, Texas. The restaurant is expected to open in H1 FY19 and will utilize a new prototype design. The Company stated that the location will serve as a showcase restaurant to promote its future franchising program in small to medium tier markets.

Stock Performance

At the close of trading session on Monday, October 16, 2017, Del Frisco's Restaurant's stock price slipped 2.75% to end the day at $12.40. A total volume of 1.26 million shares were exchanged during the session, which was above the 3-month average volume of 208.28 thousand shares. The Company's shares are trading at a PE ratio of 21.60. At Monday's closing price, the stock's net capitalization stands at $296.98 million.

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