BJRI BJs Restaurants Inc

Benihana Inc. (BNHN) reported earnings of 2 cents per share in fourth quarter 2011, which missed the Zacks Consensus Estimate of 16 cents and were also down 77.8% from the year-ago quarter's earnings of 9 cents. The decline in earnings was due to a rise in stock-based compensation expenses. 

However, the leading operator of Japanese restaurants in the U.S posted a 5.1% year-over-year increase in total revenue to $81.8 million. The total revenue benefited from the improved comparable restaurant sales at both Benihana Teppanyaki and RA Sushi restaurant.

The company’s full-year earnings per share were 2 cents versus a loss of 65 cents per share in fiscal 2010. Revenues were $14.1 million in fiscal 2011, representing a year-over-year leap of 4.5%.

Quarter Performance 

The comparable restaurant sales of the company jumped 5.6%, riding on higher same-store sales at Benihana Teppanyaki restaurants (up 7.6%). The upside in comps was attributable to higher guest count arising from the Benihana Teppanyaki Renewal Program. Moreover, same-store sales also improved 3.4% at RA Sushi restaurant benefiting from higher traffic.

However, due to inclement weather condition in April and construction scaffolding outside two Haru restaurants, same-store sales plummeted 2.7% at Haru.

The Miami-based Japanese restaurant company drives 99.5% of its revenues from restaurant sales and 0.5% from franchisee fees and royalty. Restaurant sales increased 5.2% to $81.4 million in the reported quarter and franchisee fees and royalty sales were flat year over year to $0.4 million. 

Cost of food and beverage sales spiked 50 basis points (bps) year over year to 24.7% due to higher food cost, while general and administrative expenses expanded 220 bps to 12.0%. However, restaurant operating expenses fell 100 bps to 61.8%, due to improved cost and labor management.

Operating income during the quarter was $1.6 million versus $2.9 million in the year-ago quarter.

Financial Position

As of March 27, 2011, Benihana had cash and cash equivalents of $4.0 million compared with $2.6 million as of March 28, 2010. At the end of 2011, total current assets were $15.2 million and stockholders' equity was $146.7 million.

Our Take

The company has been successful in driving traffic at Benihana Teppanyaki restaurants and continues to focus on value-based promotions, media advertising and local marketing initiatives to attract customers at RA Sushi and Haru.

The Zacks Consensus Estimates have not budged in the last 60 days, implying an absence of catalysts in the near term. The Zacks Consensus Estimates for 2011 and 2012 are pegged at 15 cents and 41 cents, respectively. 

One of Benihana’s primary competitors, BJ’s Restaurants, Inc. (BJRI) reported first quarter 2011 adjusted earnings of 25 cents per share, which surpassed the Zacks Consensus Estimate of 19 cents on the back of strong comparable restaurant sales growth. 

We have a Zacks #3 Rank (short-term Hold rating) on the stock. We also reiterate our long-term Neutral recommendation.

 
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
 
BENIHANA INC (BNHN): Free Stock Analysis Report
 
Zacks Investment Research