Same-Store Sales, Earnings Down at P.F. Chang's
P.F. Chang’s China Bistro, Inc. reported consolidated income from continuing operations of $6.2 million for the third quarter ended September 27, 2009 compared to $7.7 million for the third quarter of the prior year.
-- Chain Leader, 10/21/2009 8:18:00 AM
PRESS RELEASE: SCOTTSDALE, Ariz.--(BUSINESS WIRE)--P.F. Chang’s China Bistro, Inc. (NASDAQ: PFCB) today reported consolidated income from continuing operations(1) of $6.2 million for the third quarter ended September 27, 2009 compared to $7.7 million for the third quarter of the prior year. Net income (2) for the third quarter of fiscal 2009 totaled $6.2 million compared to $3.0 million for the third quarter of the prior year.
Income from continuing operations(1) per diluted share for the third quarter of fiscal 2009 was $0.27 compared to $0.32 for the third quarter of the prior year. Net income (2) per diluted share was $0.27 compared to $0.12 in the prior year. Prior year net income includes $7.5 million in pre-tax, non-cash asset impairment charges included in discontinued operations that were recognized during the third quarter in connection with the closure of 10 Pei Wei restaurants during the fourth quarter of 2008.
| (000 except per share data) | 3Q09 | 3Q08 | ||||
| Revenues | $ | 290,329 | $ | 295,877 | ||
| Income from continuing operations(1) | $ | 6,225 | $ | 7,655 | ||
| Net income(2) | $ | 6,208 | $ | 2,962 | ||
| Diluted income per share: | ||||||
| Income from continuing operations(1) | $ | 0.27 | $ | 0.32 | ||
| Net income(2) | $ | 0.27 | $ | 0.12 | ||
| Weighted average shares - diluted | 23,285 | 23,927 | ||||
| (1) | Income from continuing operations refers to Income from continuing operations, net of tax attributable to PFCB common stockholders | |
| (2) | Net income refers to Net income attributable to PFCB common stockholders |
For the third quarter of 2009, consolidated revenues were $290.3 million compared to $295.9 million for the third quarter of 2008. Sales at company-owned P.F. Chang’s China Bistro restaurants accounted for $217.1 million of consolidated revenues and sales at the Company’s Pei Wei Asian Diner restaurants accounted for $73.2 million of consolidated revenues.
For the 13 weeks ended September 27, 2009, comparable store sales declined 8.5% at the Bistro due to a 6% to 7% reduction in overall guest traffic combined with a slight decline in average check reflecting the net impact of menu mix changes. Comparable store sales at the Bistro decreased 8.0%, 9.4%, and 8.1% in July, August and September, respectively.
For the 13 weeks ended September 27, 2009, comparable store sales declined 0.7% at Pei Wei due to a slight decline in average check reflecting the net impact of menu mix changes partially offset by a flat to 1% increase in overall guest traffic. Comparable store sales at Pei Wei decreased 1.8% and 2.5% in July and August, respectively and increased 2.5% in September.
During the third quarter of 2009, the Company opened two new Bistro and three new Pei Wei restaurants.
2009 Expectations
The Company expects average weekly sales for the fourth quarter of fiscal 2009 to decline approximately 6% at the Bistro and increase approximately 1% at Pei Wei versus the prior year. The Company expects to open five new Bistro restaurants and two new Pei Wei restaurants during the fourth quarter of fiscal 2009. Based on the foregoing, consolidated revenues for the fourth quarter are anticipated to range from $318 million to $320 million. The Company has increased full year earnings expectations and now expects fiscal 2009 EPS from continuing operations to range from $1.70 to $1.75 per share.
2010 Development
The Company currently expects to open five new Bistro restaurants and five new Pei Wei restaurants during fiscal 2010.
The Company is hosting a conference call today at 1:00 pm ET in which management will provide further details on the current quarter results. A webcast of the call can be accessed through the company’s website at http://www.pfcb.com.
P.F. Chang’s China Bistro Inc. owns and operates two restaurant concepts in the Asian niche. P.F. Chang’s China Bistro features a blend of high-quality, traditional Chinese cuisine and American hospitality in a sophisticated, contemporary bistro setting. Pei Wei Asian Diner offers a modest menu of freshly prepared pan-Asian cuisine in a relaxed, warm environment offering attentive counter service and take-out flexibility.
Note with respect to non-GAAP financial measures contained within Supplemental Financial Information
In addition to using GAAP results in evaluating the Company’s business, management measures restaurant operating income to assess the performance of its existing restaurant concepts. Restaurant operating income includes all ongoing costs related to operating the Company’s restaurants but excludes preopening expenses and partner investment expense. Because preopening and partner investment expenses are solely related to expansion of the Company’s business and vary in timing and magnitude, they make an accurate assessment of the health of its ongoing operations more difficult and are therefore excluded. Additionally, general and administrative expenses are only included in the Company’s consolidated financial presentation as these costs relate to support of both restaurant concepts and are generally not specifically identifiable to individual restaurant operations. As the Company’s expansion is funded entirely from its ongoing restaurant operations, restaurant operating income is a primary consideration of management when determining whether and when to open additional restaurants. The non-GAAP financial information presented herein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Please see the non-GAAP to GAAP reconciliation at the bottom of pages 5 through 7 of this press release for a reconciliation of restaurant operating income to the most directly comparable GAAP measure, income from operations.
Note with respect to forward looking statements
The statements contained in this press release that are not purely historical, including the Company’s estimates of its earnings, revenues and anticipated new restaurants are forward-looking statements. The accuracy of these forward-looking statements may be affected by certain risks and uncertainties, including, but not limited to, failure of the Company’s existing or new restaurants to achieve expected results; changes in general economic and political conditions that affect consumer spending; changes in food costs; the financial performance of restaurants concentrated in certain geographic areas; litigation; the Company’s inability to retain key personnel; potential labor shortages that may delay planned openings; changes in government legislation that may increase labor costs; intense competition in the restaurant industry; tax returns that may be subjected to audits and could have material adverse impact; rising insurance costs; the inability to develop and construct the Company’s restaurants within projected budgets and time periods; failure to comply with governmental regulations; changes in how the Company accounts for certain aspects of the its partnership program; the Company’s ability to successfully expand its operations; and other risks described in the Company’s recent SEC filings.
