Exclusive: Del Taco Marketing Chief Serves Up Vibrant Q1 Earnings, Expands Crunchtada Menu Offerings

Del Taco Restaurants Inc. TACO closed its first quarter on a high note, with year-over-year increases in revenue and net income. And to help ensure encore performances for the next quarters, the company is reinventing an old favorite while taking a not-subtle jab at one of its prominent competitors.

Q1 Results: The Lake Forest, California-based company operates roughly 600 restaurants across 16 states. In its fiscal first quarter results published this week, Del Taco generated $115.5 million in total revenue, up 5.2% year-over-year, while company-operated restaurant sales were $103.6 million, a 3.2% growth one year earlier.

Also in the first quarter, net income totaled $2.6 million, or $0.07 per diluted share, compared to a net loss of $102.5 million, or $2.76 per diluted share, in the fiscal first quarter of 2020. Adjusted net income was $2.5 million, or $0.07 per diluted share, compared to $300,000, or $0.01 per diluted share, one year earlier.

Speaking with Benzinga, Del Taco’s Chief Marketing Officer Tim Hackbardt credited a “big team effort on this one — everything from operations to marketing to our field folks. That’s the big secret: the folks in the field. And our franchisees wake up every single morning trying to do the right thing for the guest.”

During the quarter, two company-operated restaurants and three franchised restaurants opened for business while two franchised restaurants closed. Del Taco is projecting 12 restaurant openings in 2021 by franchisees, and Hackbardt is seeing a growing interest from potential franchise partners in the southeast.

“We have a great hub there with the Atlanta locations in Georgia,” he said. “We moved in as company-operated locations a number of years ago and have been expanding ever since out of that hub to other cities in the southeast.”

Looking back on the pandemic period, Hackbardt acknowledged there were some bright spots in an otherwise challenging time.

“We got very, very, very good at drive-thru,” he said. “We were always sort of a leader in speed, but then we focused on it even more. Fortunately, we had quite a bit of technology already set up and we were able to scale that technology – our mobile app already had the ability to take contactless orders.

“We just weren't using it in as many places. But then we needed to use it and we were able to roll it out quite quickly. Another area where something good came out of this time was that we were able to scale delivery. We have certainly seen the benefits of that, and believe that we'll continue to see the benefits from that.”

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Crunchtada Reborn: While Del Taco was releasing its first quarter earnings, it also rolled out a new promotion that reinvented its Crunchtada in response to the disappearance of the “Mexican Pizza” from the menu at Yum! Brands’ YUM Taco Bell.

“The Crunchtada debuted at Del Taco in 2013 and was a very, very successful item,” Hackbardt said, who said the company began looking anew at the item last summer to give it an updated vibe.

Now, there are three versions of the product: The $1 Crunchtada Tostada that retains its original recipe of slow-cooked beans, Del Taco’s signature Salsa Casera, lettuce and grated cheddar on a thick corn shell; the new $2 Queso Beef Crunchtada that adds seasoned beef, Del Taco’s signature creamy Queso Blanco chopped fresh diced tomatoes to the mix; and the new $3 Chicken Guacamole Crunchtada that incorporates grilled marinated chicken, creamy ranch sauce and fresh house-made guacamole to the formula.

“When the Mexican Pizza went away, that opened up an opportunity because we saw on the Internet and social media how consumers really loved that product,” Hackbardt said. “And we could fill that void for them with not just one product – you can get it non-meat vegetarian, you can get it with beef and you can get it with chicken.”

(Crunchtada photograph courtesy of Del Taco.)