Popeyes posts larger profit, pushes ‘value'

Revenue dropped more than 8 percent to $43.8 million from $47.9 million. The company said the main reason was that it put 16 company-operated restaurants in Atlanta and Nashville under franchise control. That no longer allowed sales at those restaurants to flow directly into the parent company's treasury.

Total systemwide sales -- including sales of franchised and company-operated restaurants -- increased 2.1 percent on the strength of new restaurants, and the company said its sales in U.S. stores open at least a year outpaced the chicken fast food category for the eighth consecutive quarter.

Sales at stores open at least a year decreased 0.3 percent globally because of a falloff in the U.S., where 80 percent of Popeyes restaurants are located.

Sales grew in Canada and Turkey but slowed in Latin America, Korea and the Middle East. The company said it will shift the focus of its marketing to "value" to address the slowdown in some key international markets. Popeyes predicted that sales at stores open a year or more could fall as much as 1 percent this year, but could also rise as much as 2 percent.

Popeyes said it is burnishing its brand with a churn of promotions and new products. In recent months, the company promoted butterfly shrimp, Louisiana tenders and eight pieces of chicken for $5.99. Next week, Popeyes plans to introduce two new menu offerings: "Wicked Chicken," which comes with a small bottle of Tabasco sauce and is Popeyes' first global limited-time promotion; and "Cane Sweeeet Iced Tea" sweetened with cane sugar instead of corn syrup.

"In today's intensely competitive and increasingly global marketplace, building our brand with culinary innovation is one of our key strategic initiatives," CEO Cheryl Bachelder said in a statement. The company also touted its improving customer experience scores, faster service and better profit margins at restaurants.