O'Charley's Beats on Higher Gains - Analyst Blog
May 23 2011 - 5:45AM
Zacks
Nashville-based O'Charley’s
Inc. (CHUX) reported profit in the first quarter of 2011,
after incurring losses in six consecutive quarters. The positive
results were driven by improved comps across all three brands due
to higher traffic.
The company reported earnings of 9
cents per share, beating the Zacks Consensus Estimate of 5 cents
and a loss of 8 cents per share delivered in the prior-year
quarter.
O'Charley’s reported total revenue
of $265.0 million in the first quarter, down 0.8% year over year
due to a 2.2% drop in restaurant sales, which offset the 1.5%
upside in comparable restaurant sales.
Inside the Headline
Numbers
Same-store sales at the company’s
O’Charley's restaurants inched up 0.4% year over year on the back
of higher guest count (up 0.9%).
Same-store sales at Ninety Nine
grew 3.1% as guest count improved 0.9%. Same-store sales at Stoney
River jumped 8.4% in the quarter attributable a 13.9% increase in
guest count.
O'Charley's reported consolidated
general and administrative expenses of $11.0 million during the
quarter, up 0.9% year over year. The restaurant level margin
declined 110 basis points to 14.7%.
Casual dining chain O'Charley’s
posted adjusted EBITDA of $18.5 million in the quarter compared
with $21.5 million in the year-ago quarter. The company now expects
EBITDA for the second quarter of 2011 in the range of $9
million to $12 million.
Financial
Aspects
O’Charley ended the quarter with
cash and cash equivalents of $36.5 million, long-term debt of
$117.0 million and stockholders’ equity of $181.1 million.
Outlook
Management expects total revenue
for the second quarter in the range of $190 million to $195
million and income from operations in the range of a loss of $1
million to earnings of $2 million.
Our Take
O’Charley's efforts to focus on
value menu offerings and great services to drive traffic and the
closure of underperforming stores last year to control cost have
finally paid off as the company reported profit after six straight
quarters of losses. Estimates are expected to go up in the coming
days. The Zacks Consensus Estimates for the second quarter of 2011
and fiscal 2011 are loss of 5 cents per share and 32 cents,
respectively.
One of O’Charley’s 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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OCHARLEYS INC (CHUX): Free Stock Analysis Report
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