TACO - Del Taco: Margins Remain Under Pressure In Q3

• Del Taco Restaurants released its Q3 results earlier this year, reporting revenue of $124.3 million, a 3% increase from the year-ago period.
• This was despite lapping its Crispy Chicken launch last year and staffing-related headwinds in some hotspots.
• Unfortunately, we did see some margin pressure, with restaurant contribution margins down on a one-year, two-year, and three-year basis to 16.5%.
• At a share price of $8.50, Del Taco trades at a reasonable valuation of 15x FY2022 earnings, but I see better opportunities elsewhere in the market currently.

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