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Financial Overview — September 2011

  • Darden Restaurants, Inc. (reported that it expects diluted net earnings per share from continuing operations for its fiscal first quarter ended August 28, 2011 to be approximately 78 cents. The Company also reported that, for the first quarter, Red Lobster, Olive Garden and LongHorn Steakhouse's combined U.S. same-restaurant sales are expected to increase +2.8% versus the prior year and the Specialty Restaurant Group's combined same-restaurant sales are expected to increase +5.1% versus the prior year. Preliminary first quarter U.S. same-restaurant sales results at Red Lobster, LongHorn Steakhouse and Olive Garden are +10.7%, +4.8% and -2.9%, respectively.

    The Company estimates that Hurricane Irene adversely impacted diluted net earnings per share from continuing operations for its fiscal first quarter by approximately two cents. Hurricane Irene also adversely affected same-restaurant sales results for the quarter for Red Lobster, Olive Garden and LongHorn Steakhouse by approximately 80 basis points in August and 20 to 30 basis points in the first quarter. Darden expects to release its fiscal 2012 first quarter earnings on Wednesday, September 28, 2011, before the market opens.

  • Tootie Pie Company, Inc. (OTCQB:TOOT) reported that quarterly revenue jumped 46%, to $486,151 for quarter ending June, 2011, versus $334,075 for June, 2010.

    “Our five Tootie Pie Gourmet Cafés continue to produce solid sales growth,” reported Don L. Merrill, Jr. President & CEO. “We are excited about growing the number of Cafes to seven in time for the holiday selling season.”

    Gross profit increased to $295,145 for the period, versus $189,392 for the same period in 2010. Operating expenses increased to $517,493 for the current period, up from $417,617 for the same period in 2010. The increase in operating expenses is a result of the overall increase in production for anticipated sales increases, as well as expenses related to our five Tootie Pie Gourmet Cafés, four of which we did not own in 2010. Net loss, which includes noncash items, depreciation and amortization, was $238,162 for the three months ending June 30, 2011, versus $228,382 for the three months ending June 30, 2010.

  • Burger King Holdings Inc. would not comment on reports Wednesday that the parent of the nation's No. 2 hamburger chain is in talks about a possible sale.

    News outlets reported Wednesday morning that the Miami-based company had been meeting with potential buyers. A Burger King spokeswoman told Nation’s Restaurant News that it "does not comment on speculation or rumor."

    The Wall Street Journal said that among the prospective buyers was 3i Group of London, though a spokeswoman for the firm later told the Associated Press that it was not in talks with Burger King. The New York Times reported later Wednesday that the fast-food company was in buyout discussions with 3G Capital of New York, which last year invested in Wendy's/Arby's Group Inc.

    The buyout speculation sent shares of Burger King up more than 14 percent in midday trading Wednesday to just under $19 a share. The company's share price has traded between $16.31 and $22.19 over the past 52 weeks.

  • Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") reported financial results for the second quarter of fiscal 2012, ended July 31, 2011. The Company also reaffirmed its fiscal 2012 outlook and announced that it will present at an investor conference on September 14, 2011. Revenues Increased 11.4% to $98.0 Million from $87.9 Million For Krispy Kreme. The Company ended the second quarter of fiscal 2012 with a total of 669 Krispy Kreme stores systemwide, a net increase of 17 shops during the quarter. As of July 31, 2011, there were 88 Company stores and 581 franchise locations.
  • Benihana Inc. (NASDAQ: BNHN; BNHNA), reported total restaurant sales and comparable restaurant sales for the first four-week period (July 18, 2011 – August 14, 2011) of the second fiscal quarter of 2012. The announcement marks the Company's nineteenth consecutive four-week period of comparable restaurant sales growth. For the four-week period ended August 14, 2011, total restaurant sales increased year over year by 5.7% to $26.7 million from $25.2 million, and Company-wide comparable restaurant sales increased by 6.1% to $26.7 million from $25.1 million. By concept, comparable restaurant sales increased 6.8% at Benihana Teppanyaki, 5.1% at RA Sushi, and 3.5% at Haru. These results were driven by traffic growth of 4.1% at Benihana Teppanyaki, 5.3% at RA Sushi and 5.6% (dine-in traffic) at Haru.
  • AFC Reports Global System-wide Sales Increased 4.8 Percent Compared to a 2.8 Percent Increase Last Year. AFC Enterprises Chief Executive Officer Cheryl Bachelder stated, “Popeyes delivered on earnings expectations and had another quarter of positive same-store sales and strong new unit openings. Same-store sales gains were modest this quarter, but remain positive at 2.5 percent for the first half of the year. Despite a choppy economy and higher commodity costs, Popeyes continues to gain market share among its competitors. Higher commodity costs exerted downward pressure on operating margins; however, we took modest pricing increases on select menu items to buffer the full effect. Our strategic plan and our 2011 goals remain on track.”
  • China's Country Style Cooking Restaurant Chain 2Q11 Revenues Up 39.4% YoY to RMB234.3 Million. Revenues in the second quarter of 2011 were RMB234.3 million ($36.3 million), an increase of 39.4% from RMB168.0 million in the same quarter of 2010. 2Q11 Revenues up 39.4% YoY to RMB234.3 Million. 2Q11 Net Loss was RMB14.5 Million. 2Q11 Non-GAAP Adjusted Net Income was RMB7.6 Million. New restaurant opening target of FY11 raised to between 70 and 80 Country Style Cooking Restaurant Chain Co., Ltd (NYSE: CCSC), a fast-growing quick service restaurant chain in China.
  • Bob Evans Announces 1Q 2012 Earnings Per Share of 59 Cents, Up 44 Percent Compared to Prior Year. Company reaffirms fiscal year 2012 EPS guidance of $2.36 to $2.44 and annual earnings growth guidance of approximately 7 to 10 percent over next five years. oard of Directors approves 25 percent increase in quarterly dividend rate from 20 cents to 25 cents per share; doubles share repurchase authorization from $25 million to $50 million.
  • Jamba, Inc. reported unaudited financial results for the second fiscal quarter ended July 12, 2011. Solid results continued in the quarter reflecting growth driven by a third consecutive quarter of Company-owned comparable store improvement, international store expansion, and continued extension of the Jamba brand with new consumer products and expanded retail distribution. Jamba Q2 Sales Increase 4.3% for Company Stores. Net Income Improved to $3.9 Million from $1.6 Million, An Increase of 148% - Company Maintains Outlook for Fiscal 2011.

  • Biglari Holdings Inc., parent of Steak n Shake restaurants, said third-quarter profit was flat as revenue inched up. For the quarter ended July 6, the San Antonio-based company reported earnings of $8.7 million, or $6.49 a share, compared with similar profit in the previous-year period when earnings were $6.23 a share. Revenue rose 6.2 percent to $170.9 million in the third quarter compared with $160.9 million a year ago. Biglari reported same-store sales for units open more than 18 months increased 4.9 percent compared with the same quarter last year, and customer traffic rose 4.8 percent. Biglari has 582 restaurants comprising 488 Steak n Shake and 94 Western Sizzlin locations. Of those, 413 Steak n Shakes are company-owned and 75 franchised. Five of the Western Sizzlins are company-owned and 89 are franchised.

  • Così, Inc. (NASDAQ: COSI), the fast casual restaurant company, reported a net loss for the second quarter ended June 27, 2011 of $(634,000), or $(0.01) per basic and diluted common share, compared with a net loss of $(1,327,000), or $(0.03) per basic and diluted common share for the 2010 second quarter, after excluding the one-time gain of $5,120,000 ($0.10 per basic and diluted common share) related to the sale of thirteen Company-owned restaurants in Washington D.C. to a franchisee.

    Così's total revenues for the 2011 second quarter decreased by $2,726,000 to $26,897,000 from $29,623,000 in the 2010 second quarter. Company-owned net restaurant sales were $26,113,000 for the second quarter compared to $28,589,000 for the 2010 second quarter with the resulting $2,476,000 decline related primarily to the sale of thirteen Company-owned restaurants to a franchisee during the second quarter of 2010. Franchise fees and royalty revenues for the quarter contributed $784,000 compared to $1,034,000 in the 2010 second quarter. The decrease from last year's second quarter was due primarily to a franchise fee recognized in the second quarter of 2010 resulting from a cancelled area development agreement.

  • OSI Restaurant Partners LLC, parent company to Outback Steakhouse, Carrabba’s and Bonefish Grill, among other chains, said it will accelerate its restaurant renovation program and capital spending for the rest of 2011, in an effort to drive sales. Tampa, Fla.-based OSI plans to renovate as many as 175 Outback Steakhouse sites in 2011 after improving 84 in the first half of the year, Dirk Montgomery, OSI chief financial officer, told securities analysts during a second-quarter earnings call Friday morning. In 2010, OSI conducted 60 Outback Steakhouse renovations, which usually take three to six months, and typically result in a traffic lift of five percent, Montgomery said. The company said the renovations include a more contemporary expression of the Australian theme, using updated colors, fabrics, textures, art, lighting, props and murals. The OSI renovation program is one of several growth strategies the company is using to steal market share in casual dining, Montgomery said. The company plans to increase capital spending to between $150 million and $160 million, up from original expectations of between $125 million and $150 million, Montgomery said. For the three-months ended June 30, OSI net income fell 68 percent to $5.7 million from $17.6 million in the same quarter a year ago. In the year-ago quarter, OSI booked an $11.3 million income taxes benefit.
  • Burger King 2Q net falls 12.7%. Burger King Holdings Inc. posted second-quarter results including declines in sales and profit, leading executives to discuss major menu changes aimed at broadening BK’s consumer appeal. Jonathan Fitzpatrick, Burger King’s chief brand and operations officer, revealed on a conference call Thursday that testing of a variety of new products — such as smoothies, parfaits, salads and oatmeal — began about 30 days ago at 100 locations. The menu testing phase also includes crew training and new equipment, he said. Fitzpatrick said between 20 percent and 35 percent of the Burger King menu could consist of new products a year from now.
  • Continuing to see traction from turnaround efforts, Red Robin Gourmet Burgers Inc. reported a 59-percent increase in second-quarter profit despite lags in traffic at company-owned locations, the company said Thursday. For the quarter ended July 10, the Greenwood Village, Colo.-based casual-dining chain recorded earnings of $6.9 million, or 44 cents per share, compared with $4.3 million, or 28 cents per share, for the same quarter a year ago. Revenue for the quarter increased 7.2 percent to $215.8 million. Same-store sales at company-operated locations increased 3.1 percent, which was driven by a 4.5-percent increase in average check, partially offset by a 1.4-percent decline in guest counts, the company said. At U.S. franchise locations, same-store sales increased 2.6 percent. They were up 3.4 percent in Canada. Steve Carley, Red Robin’s chief executive, said the results represent a fourth consecutive quarter of higher same-store sales and third consecutive quarter of higher earnings.
  • Consumer-oriented initiatives at Chili’s Grill & Bar, the flagship brand of Brinker International Inc., continued to drive sales and traffic at the casual-dining chain, Brinker executives said Thursday. Although same-store sales increased in the fourth quarter ended June 29, Brinker reported that profit fell 34 percent, with the prior-year period benefiting from an additional operating week. Brinker also owns the Maggiano’s Little Italy brand. Brinker said it earned $41.9 million, or 49 cents per share, compared with $63.6 million, or 62 cents per share, a year earlier. With exclusions for tax adjustments and special items, earnings from continuing operations rose to 48 cents from 44 cents. Revenue was off 3.4 percent, to $717.5 million, with a 7.5-percent decrease because of the prior year’s additional week. Same-store sales at company units were up 2.6 percent for both concepts, with Maggiano’s seeing a 5.7-percent hike and Chili’s logging a 2.1-percent increase.
  • The Wendy’s Co. reaffirmed its 2011 earnings growth outlook even as profit margins fell in the second quarter, mostly on higher commodity costs and some incremental advertising spending. Chief executive Roland Smith said margins would remain pressured for the balance of the year, but momentum for sales, traffic and average check would help the quick-service chain achieve its earnings growth target for this year and grow that metric between 10 percent and 15 percent annually starting in 2012. Wendy’s is projecting earnings before interest, taxes, depreciation and amortization to be between $330 million and $340 million for fiscal 2011. Based on its growth goal of 10 percent to 15 percent EBITDA growth for 2012, the brand is targeting EBITDA of approximately $368 million to $385 million next year. For the July 3-ended second quarter, Wendy’s earned $11.3 million, or 3 cents per share, compared with $10.7 million, or 3 cents per share, in the same year-ago quarter. The company’s income from continuing operations, which excludes former sister chain Arby’s results, totaled $11.4 million, compared with $5.4 million a year ago. Same-store sales increased 2.3 percent at both company-owned and franchised locations in North America, Wendy’s said. Those increases included a 0.9-percent uptick in traffic and a 1.4-percent lift in the average check.
  • Jack in the Box’s same-store sales took a better-than-expected upswing in the third quarter on improved traffic and a growing average check, but the company’s earnings reported Wednesday fell short of analysts’ expectations. For the third quarter ended July 10, the San Diego-based Jack in the Box Inc., parent of the Jack in the Box and Qdoba Mexican Grill brands, reported net earnings of $18.7 million, or 38 cents per share, down 23 percent from $24.2 million, or 44 cents per share, for the same quarter a year ago. Analysts polled by Thomson Reuters had expected 40 cents per share. Earnings included gains from refranchising of about 13 cents per share for the quarter, compared with 26 cents per share in the prior year. Consolidated revenue totaled $519.3 million for the quarter, down 0.8 percent from the prior year. For the Jack in the Box chain, same-store sales rose 4.7 percent, which Jack in the Box chief executive Linda Lang attributed to investments made in recent months to enhance the guest experience at the quick-service concept.
  • Houston hospitality executive Tilman Fertitta has teamed up with “Desperate Housewives” actress Eva Longoria to manage and perhaps buy her troubled Beso restaurant in Las Vegas. Fertitta has bought other concepts out of Chapter 11 bankruptcy deals in the past year, including Claim Jumper and Oceanaire Seafood Room. Beso LLC, the company through which Longoria and her investors run the Latin-influenced Center City steakhouse, filed notice of Fertitta’s plans in U.S. Bankruptcy Court in Las Vegas on Tuesday. Beso has been in bankruptcy since January. Beso lawyers said Landry’s also intended to offer $1 million to buy Beso. Other offers would have to be considered. Fertitta, the owner and chief executive of Houston-based Landry’s Restaurants Inc., was traveling on Wednesday and unavailable for comment. But his spokeswoman released a statement that quoted him as saying, “Eva created a landmark restaurant at the spectacular City Center, and I look forward to working with her as my partner at Beso.” Longoria is a native of Corpus Christi, Texas, where Landry’s has hospitality holdings. Fertitta also has properties in Las Vegas, including the Golden Nugget Hotel and Casino, as well as several of Landry’s restaurant concepts, including Landry’s Seafood House, Chart House, Rainforest Café and Vic & Anthony’s Steakhouse.
  • Sbarro Inc. proposed to exit Chapter 11 bankruptcy by filing a joint plan of reorganization that would cut its debt by 73 percent, or $295 million, to a $110 million senior secured exit term loan facility. The operator or franchisor of more than 1,000 quick-service Italian restaurants said the proposal is subject to an overbid process, which allows Sbarro’s creditors to maximize their recovery of the company’s $405 million in debt. The plan, which also includes a related disclosure statement, was filed with the U.S. Bankruptcy Court for the Southern District of New York. Sbarro’s first-lien lenders approved the plan, upon completion of which they would own substantially all of the company’s equity. The lenders also have committed to provide Sbarro with a new $18.6-million term loan facility to provide sufficient working capital for the chain once it emerges from bankruptcy. A hearing to consider approval for the reorganization is scheduled for Sept. 7. Sbarro Inc. filed for bankruptcy April 4.

  • McDonald's July Sales Are Up Five+ Percent

    "McDonald's continues to deliver great tasting, high quality food at an outstanding value to a growing number of customers around the world," said McDonald's Chief Executive Officer Jim Skinner. "We're creating a unique McDonald's experience that is welcoming our customers into modern restaurants with convenient hours and locations and offering more choice in food and drink options than ever before."
    • U.S. up 4.4%
    • Europe up 5.3%
    • Asia/Pacific, Middle East and Africa up 4.0%
    In the U.S., July comparable sales rose 4.4% as McDonald's remains a relevant and affordable choice for consumers. July results were fueled by the popularity of the McCafe beverage line-up, including the recently introduced Mango Pineapple Smoothie, core products including Chicken McNuggets and McDonald's market-leading breakfast.

  • Carrols Restaurant Group, Inc. Completes Refinancing

    Carrols Restaurant Group, Inc. Closed Its Previously Announced Offering of $200 Million of 8.875% Senior Secured Second Lien Notes Due 2016. Fiesta Restaurant Group Owns and Operates the Pollo Tropical and Taco Cabana Restaurant Businesses. The 8.875% senior secured second lien notes due 2016 are senior secured obligations of Fiesta Restaurant Group and are guaranteed by its material subsidiaries.

    Concurrently with the closing of the offering of the 8.875% senior secured second lien notes due 2016 of Fiesta Restaurant Group, Carrols LLC, a wholly owned subsidiary of Carrols, also entered into a new $85 million senior credit facility providing for term loan borrowings of $65 million and a $20 million revolving credit facility. Fiesta Restaurant Group used the net proceeds of the offering of the 8.875% senior secured second lien notes due 2016, and Carrols LLC used term loan borrowings from its new senior credit facility, to distribute funds to Carrols to enable Carrols to (i) repurchase Carrols’ outstanding 9% senior subordinated notes due 2013 tendered pursuant to a previously announced cash tender offer and to pay the related tender premium, (ii) repay outstanding borrowings under the existing Carrols senior credit facility and (iii) pay related fees and expenses. Fiesta Restaurant Group and Carrols LLC will also use proceeds from the respective financings to distribute funds to Carrols to enable Carrols to redeem the balance of its outstanding 9% senior subordinated notes due 2013 not tendered in the tender offer, which has not yet expired.

  • Revenue Totaled R$51.0 Million, Up 7.6% from the Second Quarter 2010 - Brazil Fast Food Announces Second Quarter 2011 Results

    System-wide sales grew 19.8% in the second quarter to R$207.9 million, driven by an increase in franchised points of sale as well as higher sales from company-owned stores.

    Total revenue for the second quarter 2011 increased by 7.6% to R$51.0 million from R$47.4 million in the second quarter 2010. Revenue growth was driven primarily by the continued expansion of Brazil Fast Food’s franchise network and higher sales from company-owned stores.

    The Company ended the second quarter of 2011 with 805 points of sale, compared to 735 in the comparable period in 2010.

    Net revenue for company-owned and operated outlets was up 9.0% year over year to R$38.3 million in the second quarter of 2011, reflecting an increase in net revenues across the Company’s KFC and Pizza Hut brands, offset somewhat by a decrease in net revenues for the Company’s Bob’s brand due to a reduction in company-owned Bob’s outlets from 55 as of June 30, 2010, to 39 at the end of second quarter 2011 and also offset somewhat by a decrease in Doggis net revenues.

    Net revenue from franchisees increased 29.2% year over year to R$7.8 million, driven primarily by an increase in number of franchised retail outlets to 736, up from 650 in the same period a year ago. Other revenue and income totaled R$4.8 million in the second quarter of 2011.

    Operating expenses grew 2.0% to R$46.9 million in the second quarter of 2011, primarily due to higher administrative expenses to support the growth of the business as well as increased store costs and expenses. As a percentage of revenue, operating costs declined from 97.1% of total revenue in the second quarter of 2010 to 92.1% of total revenue in the second quarter of 2011, mainly attributable to the company’s strategy to limit its direct operations to its most profitable outlets and also due to improved franchise margins.

    Operating income for the second quarter of 2011 was R$4.0 million, compared to operating income of R$1.4 million in the second quarter of 2010. Operating margin in the second quarter of 2011 was 7.9% compared to 2.9% in the same period of 2010.

  • Second Quarter 2011 Financial Results For McCormick & Schmick’s Seafood Restaurants, Inc.

    Revenues for the second quarter of 2011 decreased 1.1% to $88.7 million compared to $89.7 million in the second quarter of 2010. Comparable restaurant sales decreased 2.7%. GAAP net loss was $3.0 million, or $0.20 per diluted share, which includes impairment, restructuring and other charges of $2.5 million, and expenses related to the unsolicited tender offer, potential sales process and broad evaluation of the Company’s strategic alternatives of $1.8 million; compared to GAAP net income of $1.3 million, or $0.09 per diluted share. On a pro-forma basis the Company generated EPS of $0.09 per diluted share, in line with the same period in 2010.

  • Einstein Noah Restaurant Group, Inc. (NASDAQ: BAGL), reported financial results for the second quarter ended June 28, 2011.

    Selected Highlights for the Second Quarter 2011 Compared to the Second Quarter 2010:

    • Total revenues increased to $103.7 million from $103.5 million.
    • System-wide comparable store sales were +0.2%, a sequential increase of 100 basis points from the first quarter of 2011.
    • Adjusted EBITDA of $9.7 million compared to $11.7 million.
    • Net income available to common stockholders of $3.1 million, or $0.18 per diluted share, compared to $3.6 million, or $0.21 per diluted share.
    • Free cash flow of $5.5 million compared to $4.7 million.

  • J. Alexander’s Corporation (NASDAQ: JAX) reported operating results for the second quarter and first half of fiscal 2011 ended July 3, 2011.

    A summary of the second quarter of 2011, compared to the second quarter of 2010, follows:

    • Net sales increased 6.1% to $38,564,000 from $36,336,000.
    • Average weekly same store sales per restaurant increased by 6.0%.
    • Income before income taxes was $47,000 compared to a loss before income taxes of $357,000 in the second quarter of 2010.
    • An income tax benefit of $10,000 was recorded in the second quarter of 2011 compared to an income tax benefit of $383,000 in the second quarter of 2010.
    • Net income was $57,000 compared to net income of $26,000 in the second quarter of 2010, and the diluted earnings per share were $.01 compared to $.00 per share in the second quarter of 2010.

  • CEC Entertainment braces for rocky 3Q

    CEC Entertainment Inc., parent company of the 555-unit Chuck E. Cheese’s brand, said Thursday that its second-quarter profit rose 36 percent, but it warned of a choppy start to the third quarter.

    The Irving, Texas-based company said profit for the second quarter rose to $6.5 million, or 34 cents per share, from $4.8 million, or 22 cents per share, last year. Revenue increased 3 percent, to $186.2 million from $181 million in the prior-year period.

    Same-store sales for the second quarter ended July 3 edged up 0.3 percent, and were up 0.8 percent for the first half of the year. But the company warned that the comparable figures for the first four weeks of the third quarter were down an average 7.9 percent.

    Executives speaking with analysts after earnings were released Thursday cited weak consumer confidence and competition from children-oriented movies for some of the slippage.

  • McCormick & Schmick's revenue dips in 2Q

    McCormick & Schmick’s Seafood Restaurants Inc. downgraded its outlook for the year on Thursday, citing the slow pace of recovery and the closure of two locations.

    For its second quarter ended June 29, Portland, Ore.-based McCormick & Schmick’s reported a net loss of $3 million, or a loss of 20 cents per share, compared with a profit of $1.3 million, or 9 cents per share, for the same quarter a year ago. The loss included impairment, restructuring and other charges related to the unsolicited tender offer by Tilman Fertitta of Landry’s Restaurants Inc., as well as the company’s putting itself up for sale and evaluation of strategic alternatives.

    Fertitta pulled his tender offer in July, but said he would participate in the sale process.

    Revenue for the second quarter declined 1.1 percent to $88.7 million, with same-store sales down 2.7 percent.

    For the year, McCormick & Schmick’s projects revenue between $340 million and $350 million, down from the $345 million to $355 million projected previously, though the guidance does not consider the impact of the unsolicited tender offer from Landry’s. Earnings are expected to be between 26 cents and 31 cents. Earlier estimates were between 31 cents and 36 cents.

  • Why some chains falter on price hikes
    P.F. Chang’s, Ruby Tuesday and IHOP rethink their pricing strategies after traffic drops.

    Halfway into a challenging year marked by rising commodity costs, menu pricing is expected to emerge as a key issue for restaurant chains as they struggle to drive customers through their doors.

    The need for pricing to address soaring commodity inflation has been a common theme in earnings reports all year, and many in the restaurant world have raised prices to some degree in various ways —some for the first time in years. Others have price hikes scheduled for the second half of the year.

    The recent round of earnings calls has offered some insight into pricing.

    Many chains, such as McDonald’s, Starbucks, Chipotle Mexican Grill, Texas Roadhouse and Panera Bread, have boasted positive sales trends that included menu price hikes with no impact on guest behavior.

    Others, however, such as P.F. Chang’s China Bistro, Ruby Tuesday and IHOP, say they are rethinking their strategies on pricing and perceived value after seeing guests turn away in droves.

    When asked why some brands are seeing better consumer acceptance of higher prices than others, analyst Bart Glenn of D.A. Davidson Research said it all comes down to consumer perception of value, not who has the lowest prices.

  • NPC’s 2Q profits flat, revenue down.

    Asserting that consumers are seeking “discrete value,” executives at NPC International Inc., Pizza Hut’s largest franchisee, said Wednesday the company has re-launched value-oriented pricing for traditional pies. NPC, which operates 1,141 Pizza Hut restaurants and delivery units, on Tuesday reported net income of $5.2 million in the second quarter ended June 28, essentially flat with last year. Revenue in the quarter was $238.6 million, down from $246.8 million in the prior-year period. Same-store sales fell 2.8 percent in the quarter, compared with a strong increase of 10.4 percent in the same period last year. The Overland Park, Kan.-based company attributed that increase to Pizza Hut’s popular three-topping $10 Any Pizza campaign in the same period of 2010.

  • Sodexo to buy Lenôtre pastry, catering firm.

    International on-site foodservice company Sodexo said it signed an agreement to acquire the pastry and catering firm Lenôtre.

    Paris-based Sodexo did not disclose the terms of the deal and said the purchase was subject to approval from the French competition authority.

    Sodexo said it viewed the acquisition of Lenôtre, which operates pastry shops, a Paris-based culinary school and half a dozen restaurants, including three-Michelin-star Le Pré-Catalan in Paris, as “a unique opportunity to develop its portfolio of prestige activities in France and internationally.” Patrick Scicard, chairman of Lenôtre’s management board since 1995, will continue to oversee the company and work with his existing team, Sodexo said.

    Sodexo employs 380,000 people in 80 countries. In the year ended August 31, 2010, it generated revenue of 15.3 billion euros, about $22 billion U.S., and was operating 34,000 sites, serving 50 million customers a day.

  • Owners hang ‘for sale’ sign at Krystal.

    The Krystal Company is looking for a buyer for its 79-year-old Krystal burger brand, the company said Wednesday.

    The Chattanooga, Tenn.-based company, which operates Krystal restaurants in 11 states in the Southeast, said it is exploring a sale of the quick-service burger concept that’s known for its iconic and inexpensive sliders.

    “Having seen the company through significant growth since 1997, the board feels that now is the appropriate time to seek a new investor to help take the company to the next level,” Krystal’s chief executive Fred Exum said in a statement. “This is an exciting time for the entire family of Krystal stakeholders, over 7,000 employees and our franchisees,” Exum said. “The target is to deliver an attractive exit for current shareholders who have been tremendously supportive over the past 14 years while also establishing a solid platform for our employees to further expand the brand by continuing to serve our loyal customers.”

    Krystal enlisted Piper Jaffray, a middle market investment bank and asset management firm, to help with the sale.

  • Commodity costs drive price hikes at Dunkin’. Dunkin’ Donuts and Baskin-Robbins are increasing prices in response to the rising costs of coffee and milk, Nigel Travis, chief executive of Dunkin’ Brands Inc., the chains’ parent company, said in a conference call on second quarter earnings.

  • Dunkin' Brands Group 2Q profits slip. Higher charges and expenses lowered Dunkin’ Brands Group Inc. earnings by less than 1 percent in the second quarter, the company reported Wednesday. Net income for Dunkin’ Brands, which went public late last month, slipped to $17.2 million compared with $17.3 million for the year-ago period. Revenue for the Canton, Mass.-based parent of Dunkin’ Donuts and Baskin-Robbins rose 4.4 percent to $157 million in the period ended June 25, compared with $150.4 million in the second quarter of 2010. The company said income growth was impacted by higher ice cream costs due to rising commodity prices. U.S. same-store sales increased 3.2 percent systemwide — 3.8 percent at Dunkin’ Donuts and 2.8 percent at Baskin-Robbins.

  • Dunkin' Brands Group, Inc. Announces Pricing of Initial Public Offering. Dunkin' Brands Group, Inc. (Nasdaq: DNKN), the parent company of Dunkin' Donuts and Baskin-Robbins, announced the initial public offering of 22,250,000 shares of its common stock at a price of $19 per share. The Company's shares are expected to begin trading on The NASDAQ Global Select Market on July 27, 2011 under the trading symbol "DNKN." In addition, the underwriters have been granted a 30-day option to purchase up to an additional 3,337,500 shares.

  • Caribou Coffee Q2 Sales Up 16%. Updates 2011 Outlook and Raises Diluted EPS Range - Net sales growth of 11% - Diluted earnings per share on a pro forma basis are now expected to be between $0.39 and $0.41.

    Caribou Coffee Company, Inc. (NASDAQ:CBOU), the second largest company-owned premium coffeehouse operator in the United States based on the number of coffeehouses, reported financial results for the second quarter of 2011 (thirteen weeks ended July 3, 2011). The Company also updated its fiscal 2011 outlook and raised its diluted EPS guidance range for the year.

  • Nathan's Famous Q2 Revenues Up - Net Income Down.

  • Peet’s Coffee & Tea Reports 12% Revenue Growth For Q2.

    Net income for the 13 weeks ended July 3, 2011, was $5.1 million compared to $4.3 million for the corresponding 13-week period of fiscal 2010. Diluted earnings per share was $0.38 for the 13-week period of fiscal 2011 compared to $0.31 per share for the corresponding period of fiscal 2010, an increase of 23%.

  • Denny’s earnings climb 32% in 2Q.

    Denny’s Corp. reported positive second quarter results, fueled in part by affordable menu pricing and limited time offers, the company said Tuesday. Net income at the Spartanburg, S.C.-based family-dining chain rose 32 percent to $8.1 million, or eight cents per share, compared with $5.5 million, or five cents per share, for the same period a year ago.

    Denny’s systemwide same-store sales rose 2 percent, with same-store sales for company locations increasing 2.6 percent for the June 29-ended quarter. Franchised units generated a 1.8-percent increase for the period.

    It was the first time since the third quarter of 2007 that both company and franchise same-store sales increased in the same period, the company said. Denny’s same-store guest counts rose 1.4 percent at company-owned units — the first time since the third quarter of 2006 that both same-store sales and guest count were positive.

  • Papa John’s International, Inc. (NASDAQ: PZZA) announced revenues of $293.5 million for second quarter 2011, a 4.6% increase from revenues of $280.6 million for second quarter 2010.

    Net income was $12.1 million for second quarter 2011, or $0.47 per diluted share, compared to $13.2 million for second quarter 2010, or $0.49 per diluted share ($11.5 million, or $0.43 per diluted share, excluding the consolidation of BIBP Commodities, Inc. (“BIBP”), a variable interest entity). See “Non-GAAP Measures” for additional information regarding BIBP.

    Revenues were $606.0 million for the six months ended June 26, 2011, a 7.0% increase from revenues of $566.4 million for the same period in 2010. Net income was $28.6 million for the six months ended June 26, 2011, or $1.11 per diluted share, compared to net income of $30.1 million for the same period in 2010, or $1.11 per diluted share ($26.2 million, or $0.97 per diluted share, excluding BIBP, an increase of $2.4 million).

  • Texas Roadhouse Q2 Sales Up Comparable restaurant sales increased 4.4% at company restaurants and 3.6% at franchise restaurants - Three company restaurants opened.

    G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, “We maintained our positive sales momentum through the second quarter generating double digit revenue gains and a seven percent increase in earnings per share. In addition, sales performance at newer restaurants was a highlight as they continued to outpace our system. We continue to build an increasing pipeline of new locations and expect to open at least 25 restaurants in 2012, a 25% increase over our forecast for this year. Finally, our cash flow remains healthy, allowing us to not only fund new development internally, but also return capital to shareholders through share repurchases and our second quarterly dividend in July. We are pleased with our overall progress in an otherwise uncertain environment and we continue to believe Texas Roadhouse is among the best positioned companies in the casual dining sector.”

  • Arcos Dorados Q2 Revenues Up 28.7% Arcos Dorados Holdings Inc. (NYSE: ARCO), Latin America’s largest restaurant chain and the world’s largest McDonald’s franchisee, reported unaudited results for the second quarter ended June 30, 2011.

  • Real Mex Restaurants, Inc. announced that it has reached an agreement with lenders to waive and amend certain covenants as it works to revise its corporate capital structure. The company also reported that it made a $9.1 million interest payment due this month. An affiliate of Sun Capital Partners provided additional liquidity as part of the ongoing restructuring process.

  • 2011 Second Quarter Financial Results for Ruth’s Hospitality Group, Inc. Food and beverage costs, as a percentage of restaurant sales, increased 120 basis points to 30.5%, primarily due to unfavorable beef costs. Restaurant operating expenses, as a percentage of restaurant sales, decreased 150 basis points to 51.7%, primarily due to sales leverage on fixed costs.

    Michael P. O'Donnell, Chairman, President and Chief Executive Officer of Ruth's Hospitality Group, Inc., stated, “We continue to manage our business by focusing on high-level execution, conservative pricing, and creating great value for our guests. Our second quarter performance included our fifth consecutive quarter of comparable sales growth and our sixth consecutive quarter of traffic gains in the Ruth’s Chris brand, and while we continue to absorb higher beef costs, our restaurant-level margins improved year over year. Finally, we continued to strengthen our balance sheet during the quarter, and remain active in evaluating development opportunities.”

  • P.F. Chang Q2 Revenues Down. P.F. Chang's China Bistro, Inc. (NASDAQ: PFCB) reported financial results for the second quarter of fiscal 2011, which ended on July 3, 2011. Total revenues were $311.0 million in the second quarter of fiscal 2011 as compared to $312.8 million in the prior year. Net income and diluted net income per share were $9.1 million and $0.40, respectively.

    Comparable store sales decreased 2.5% at the Bistro and 2.7% at Pei Wei in the second quarter of 2011 due, in both cases, primarily to a decline in guest traffic. These sales declines occurred in the face of a one to two percent menu price increase at the Bistro and a two to three percent menu price increase at Pei Wei.

    On a monthly basis, comparable store sales for April, May and June decreased 2.2%, 2.6%, and 2.9%, respectively, at the Bistro and decreased 4.0%, 2.5%, and 1.3%, respectively, at Pei Wei.

  • Buffalo Wild Wings, Inc. Announces Second Quarter Earnings Per Share of $0.58 and Quarterly Net Earnings Growth of 16.4%. Buffalo Wild Wings, Inc. (NASDAQ: BWLD), announced today financial results for the second quarter ended June 26, 2011. Highlights for the second quarter versus the same period a year ago were:
    • Total revenue increased 26.4% to $184.1 million
    • Company-owned restaurant sales grew 27.6% to $167.9 million
    • Same-store sales increased 5.9% at company-owned restaurants and 2.7% at franchised restaurants
    • Net earnings increased 16.4% to $10.7 million from $9.2 million, and earnings per diluted share increased 16.0% to $0.58 from $0.50
  • Morton’s Restaurant Group, Inc. Reports Results for Second Quarter 2011. “We are pleased to report a strong second quarter, with comparable restaurant revenue up by 8.2%, reflecting our sixth consecutive quarter with positive comparable revenues,” said Christopher J. Artinian, President and Chief Executive Officer of Morton's Restaurant Group, Inc. “We also experienced an increase in overall traffic during the quarter, and our higher sales volumes were accompanied by expanded operating margins. In addition, business travel continues to trend positively, as evidenced by our increased traffic in convention markets. We remain well positioned to continue to grow our world recognized brand both domestically and internationally, especially in Asia. I remain especially proud of our employees who set the bar so high and consistently deliver the Morton's Gold Standard experience to our guests, and who take such pride in serving ‘The Best Steak Anywhere!’”
  • Panera Bread Company Reports Q2 2011 Diluted EPS of $1.18, Up 39%. Panera Bread Company (NASDAQ: PNRA) reported net income of $36 million, or $1.18 per diluted share, for the fiscal second quarter ended June 28, 2011. The second quarter of fiscal 2011 results compare to net income of $27 million, or $0.85 per diluted share, for the second quarter ended June 29, 2010, and represent a 39% year-over-year increase in diluted earnings per share.
  • Kona Grill Q2 Sales Up 13.6%. Restaurant sales increased 13.6% to $25.8 million from $22.7 million in the same year-ago quarter. The sales improvement reflects a 9.1% increase in same-store sales driven by strong traffic, higher average guest check and approximately 2.2% in menu pricing, as well as additional revenue from the Kona Grill in Baltimore, Maryland that opened during the fourth quarter of 2010.

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