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WRAPUP 2-P.F. Chang's, Chipotle, Domino's top Street
July 22, 2009 / 3:13 PM / 8 years ago

WRAPUP 2-P.F. Chang's, Chipotle, Domino's top Street

* Chipotle tops Wall Street view, worries linger

* P.F. Chang’s profit beats expectations, raises ‘09 view

* Domino’s bests analysts’ expectations, Landry’s misses

* Domino’s shares inch up, Chipotle and others fall

(Recasts, adds Chipotle results; previous dateline CHICAGO)

By Jessica Wohl and Lisa Baertlein

CHICAGO/LOS ANGELES, July 22 (Reuters) - Chipotle Mexican Grill, P.F. Chang’s China Bistro Inc and Domino’s Pizza Inc posted quarterly profit on Wednesday that topped expectations, but shares were mixed as investors fretted over their prospects in a lingering recession.

Chipotle (CMG.N), known for its premium-priced, fast-food Mexican entrees made with naturally raised meats, posted a quarterly profit of $1.10 per share, versus Wall Street’s call for earnings of 88 cents.

The restaurant chain got a boost from higher menu prices and spending cuts on everything from staffing to marketing, but analysts worried whether the company could maintain the momentum.

“It’s a question here of sustainability of this type of performance,” RBC Capital Markets analyst Larry Miller said.

Earlier in the day, P.F. Chang’s PFCB.O said cost cuts helped it post better-than-expected quarterly earnings from continuing operations. The company raised its 2009 forecast, but said sales weakened in July and that it expected profitability to take a hit from a looming federal minimum wage increase.

Domino’s (DPZ.N) profit also topped analysts’ view. Most notably, sales at domestic locations open at least one year were down just 0.7 percent, compared with the 8 percent drop reported by rival Pizza Hut, a unit of Yum Brands Inc (YUM.N).

”The challenge for Domino’s is that they derive a fair amount of their sales from dinner,“ which is more discretionary than breakfast or lunch,” said Tom Forte, analyst with Telsey Advisory Group. “The whole pizza category is seeing incremental pressure that McDonald’s (MCD.N) or Burger King BKC.N or others aren‘t.”

Domino’s shares finished up 7 cents, or less than 1 percent, to $8.44.

Stock in Chipotle fell just over 1 percent to $87.80 in extended trade and P.F. Chang’s shares lost nearly 7 percent of their value to close at $32.48.

Landry’s Restaurants Inc LNY.N, a restaurant and casino operator, posted weaker-than-expected profit as consumers cut back on trips to Las Vegas and trips to its eateries. [ID:nBNG511256] Its shares dropped 12.6 percent to $8.80.

The results landed a day after Starbucks Corp’s (SBUX.O) strong profit surprised the market [ID:nN21362287] and a day before results from McDonald‘s, which has outperformed most other restaurant chains during this recession.

Sit-down restaurants like P.F. Chang’s and the Landry’s chains Chart House and Rainforest Cafe were suffering long before the United States officially slid into recession in late 2007. Many chains are slashing costs and using discounts to attract diners. P.F. Chang’s is pricing five dishes at $9.95 to appeal to budget-conscious diners, and introduced a kid’s menu.

Reporting by Jessica Wohl in Chicago, Amitha Rajan in Bangalore and Lisa Baertlein in Los Angeles; Editing by Jeffrey Benkoe, Brian Moss, Phil Berlowitz

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