American Blue Ribbon margins on the rise

Adjusted EBITDA up 20% from Q1, but O'Charley's sales slipped in Q2

The Nashville-based restaurant operations under the umbrella of Fidelity National Financial cranked up their profitability in the second quarter as almost all of its concepts grew same-store sales.

American Blue Ribbon Holdings, which is home to O'Charley's and a handful of other concepts, and J. Alexander's posted combined revenues of $347 million in the quarter. That was down slightly from the $351 million from the first quarter, when Fidelity National closed four restaurants. But the division's adjusted EBITDA climbed more than 20 percent from the first quarter to $23 million, helped by a 1 percent gain in same-store sales. Operating profits totaled $5 million.

On their conference call with analysts and investors, Fidelity National executives on Tuesday said all of their concepts except for O'Charley's posted same-store sales increases. At O'Charley's, where American Blue Ribbon CEO Hazem Ouf is in the middle of a big store remodeling program, same-store sales fell about 1 percent. At J. Alexander's, the same-store gains came in at 3.3 percent.

The adjusted EBITDA margin of the American Blue Ribbon/J. Alexander's group — Fidelity National owns 55 percent of the former entity and 87 percent of the latter — ended the quarter at 6.7 percent, up from 5.3 percent in Q1 and 5.1 percent late last year. Fidelity National execs earlier this year said their long-term goal for the division is 8.5 percent to 10 percent.