Morton's Surpasses Estimates - Analyst Blog
May 09 2011 - 6:30AM
Zacks
Chicago-based Morton’s
Restaurant Group, Inc. (MRT) recently posted first quarter
2011 adjusted earnings of 16 cents, surpassing the Zacks Consensus
Estimate of 13 cents and the year-ago quarter earnings of 11 cents
per share. The earnings were driven by improvement in business
travel resulting in five consecutive quarters of positive comps and
margin expansion.
During the quarter, GAAP net income
from continuing operation was $2.2 million or 12 cents per share
compared with $1.2 million or 7 cents per share in the year-ago
quarter.
Morton’s, one of the leading
operators of steakhouses in the world, reported that total revenue
in the quarter climbed 9.6% from the prior-year quarter to $82.5
million and was also ahead of the Zacks Consensus Estimate of $82
million. The upside in revenues was attributable to a comparable
sales growth of 7.5% at Morton’s steakhouse restaurants.
During the quarter, operating
margin expanded 150 basis points (bps) to 5.0%, aided by a 280-bp
fall in restaurant operating expense, a 10-bp dip in depreciation
and amortization expense and a 10-bp decline in marketing and
promotional expense, partially offset by higher food and beverage
costs (up 90 bps), pre-opening cost (up 20 bps) and general and
administrative expense (up 50 bps).
During the quarter, the company
opened a brand new steakhouse in uptown Dallas, Texas.
Outlook
For the second quarter of 2011,
management expects revenue in the range of $76 million to $78
million, same restaurant revenue to inch up 6% to 8% and earnings
per share in the 3 cents to 5 cents range.
For fiscal 2011, the company
anticipates revenue between $319 million and $323 million,
comparable restaurant revenue to rise 6% to 8% and earnings per
share between 45 cents and 49 cents.
Our Take
As the economy is showing signs of
improvement, we believe Morton’s will be able to generate improved
earnings. Morton’s has not only improved its comps but it has also
been able to enhance margins despite cost inflation due to higher
customer visits. The company is also making efforts to expand its
business in both domestic and international markets. We expect
estimates to go up in the coming days based on first quarter
results and a positive outlook. The Zacks Consensus Estimates for
2011 and 2012 are pegged at 47 cents and 57 cents,
respectively.
One of Morton’s primary
competitors, BJ’s Restaurants, Inc. (BJRI)
reported first quarter 2011 adjusted earnings of 25 cents per
share, exceeding the Zacks Consensus Estimate of 19 cents driven by
strong comparable restaurant sales growth.
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MORTONS RESTRNT (MRT): Free Stock Analysis Report
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