UPDATE 3-P.F. Chang's 2nd-qtr profit up; raises forecast
(Rewrites first paragraph; adds analyst comment; updates share activity)
NEW YORK, July 23 (Reuters) - P.F. Chang's China Bistro Inc (PFCB.O) posted better-than expected quarterly profit on Wednesday, helped by cost controls, and raised its forecast for the full year.
Second-quarter net income at the Scottsdale, Arizona-based Asian-themed restaurant chain inched up to $9.4 million, or 39 cents per share, from $9.3 million, or 36 cents per share, a year earlier.
It earned 40 cents a share from continuing operations. On that basis, it topped the analysts' average expectation of 32 cents, according to Reuters Estimates.
Consolidated revenue rose to $304.1 million from $266.8 million.
Same-store sales at its namesake restaurants fell 2.3 percent in the quarter despite higher prices as fewer people ate out. At its Pei Wei Asian Diner chain, same-store sales dropped 3.2 percent.
Customer visits have fallen at sit-down restaurants like P.F. Chang's as a depressed real estate market and higher gas and food costs force people to cut back or go to lower-priced chains.
"Revenues at both concepts for the second quarter were slightly below our expectations, and we continue to believe that consumers will remain under economic pressure for the rest of the year," Chief Executive Rick Federico said in a statement.
The company raised its full-year earnings forecast to a range of $1.36 to $1.42 per share from $1.34 to $1.40, citing its stronger-than-expected results in the past two quarters.
At the same time, it lowered its sales forecast for the year. It now expects 12 percent to 13 percent sales growth, lowered from 13 percent to 14 percent.
Robert W. Baird & Co analyst David Tarantino said the company may need continued strength in margins in its namesake restaurants and improved operating performance at Pei Wei to hit its new forecasts.
"We think the Bistro is not well positioned in the current environment due to its relatively high average guest check and exposure to markets with severe housing problems," said Tarantino. He added that external pressures make him "less confident" in the company's second-half outlook.
The chain also said it reached a new agreement to sell assets of its Taneko Japanese Tavern Restaurant business. The transaction is expected to close Aug. 1.
P.F. Chang's still expects to open 17 namesake restaurants and 25 Pei Wei units this year.
Citing the "current macro environment," it cut its 2009 plans and expects to open 12 to 14 namesake restaurants and 6 to 10 Pei Wei locations.
The stock was up 7 cents to $25.79 in mid-day trade on Nasdaq. The shares are down about 28 percent from a year ago, compared with a 30 percent decline for Chili's Grill & Bar parent Brinker International Inc (EAT.N), a 36 percent drop at the Cheesecake Factory Inc (CAKE.O) and a 28 percent fall at Olive Garden owner Darden Restaurants Inc (DRI.N). (Additional reporting by Lisa Baertlein in Los Angeles; editing by Steve Orlofsky/Jeffrey Benkoe)
