* Q3 EPS 27 cents vs Wall Street view of 31 cents
* Raises '09 EPS view, but still below Street
* Sees Q4 revenue $318 mln-$320 mln
* Shares fall more than 7 percent
(Adds company and analyst comment, byline; updates share
By Lisa Baertlein
LOS ANGELES, Oct 21 P.F. Chang's China Bistro
Inc PFCB.O posted lower-than-expected quarterly profit and
revenue on 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
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
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.
The result contributed to Standard & Poor's Equity Research
analyst Mark Basham's decision to maintain his "sell" opinion
on the company's shares.
"We note our ongoing concern that cost cuts are having a
material adverse impact on restaurant operations. We think
(third-quarter) sales adds further support to this view,"
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 (EAT.N) said on 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 per share
from continuing operations of $1.70 to $1.75 per share, up from
its prior forecast of $1.60 to $1.65.
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 have been expecting $320.9 million, according
to Thomson Reuters I/B/E/S.
"I have a hard time believing that 2010 will be worse than
2009 with respect to the consumer," co-Chief Executive Bert
Vivian said on a conference call with analysts.
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 7.6 percent at $31.09 in
late afternoon trading on Nasdaq.
(Additional reporting by Martinne Geller in New York Dave
Zimmerman and Gerald E. McCormick)