Oct. 21 - P.F. Chang's China Bistro Inc posted lower-than-expected quarterly profit and revenue Wednesday, hurt by weak sales at both of its restaurant chains, and shares fell more than 7 percent.
The operator of the P.F. Chang's China Bistro and Pei Wei Asian Diner chains also raised its full-year earnings outlook, though the new forecast was still below Wall Street expectations.
Full-service restaurants like P.F. Chang's have suffered from the lingering recession, with many slashing costs and offering discounts to attract diners.
Net income at the upscale Chinese restaurant was $6.2 million, or 27 cents per share, in the third quarter, up from $3.0 million, or 12 cents per share, a year earlier, when one-time charges hurt results.
Revenue in the latest quarter fell to $290.3 million from $295.9 million a year earlier.
Analysts on average were expecting earnings of 31 cents per share on revenue of $295.8 million, according to Thomson Reuters I/B/E/S.
Sales at restaurants open at least 18 months fell a steeper-than-expected 8.5 percent at its namesake restaurants, as traffic declined and consumers spent less on meals. Sales slipped 0.7 percent at the newer and smaller Pei Wei chain.
RBC Capital Markets analyst Larry Miller said P.F. Chang's had warned investors that the benefits from cost savings would not last forever and that the company's 10.6 percent restaurant margin was weaker than expected.
Rival Brinker International Inc said Tuesday that its continued reliance on aggressive discounts to woo customers was eating into profits. In particular, it cited a promotion at Chili's Grill & Bar designed to feed two people with two entrees, a shared appetizer and dessert for $20.
P.F. Chang's said it now expects 2009 earnings from continuing operations of $1.70 to $1.75 per share, up from its prior forecast of $1.60 to $1.65 per share.
Analysts on average were expecting $1.77 per share, according to Thomson Reuters I/B/E/S.
The company said it expects average weekly sales for the current fourth quarter to fall about 6 percent at its namesake restaurants and rise about 1 percent at Pei Wei.
It expects fourth-quarter revenue of $318 million to $320 million. Analysts were expecting $320.9 million, according to Thomson Reuters I/B/E/S.
The company said it plans to open five new P.F. Chang's and two new Pei Wei restaurants during the fourth quarter, and five P.F. Chang's and five new Pei Wei restaurants in 2010.
Shares in P.F. Chang's were down 7.2 percent at $31.21 in morning trading on Nasdaq.