NASHVILLE Tenn. While consumer pressures tied to the recession pushed fourth-quarter sales into negative territory at the three chains of O’Charley’s Inc., its namesake brand and Stoney River Legendary Steaks chain posted their first year-to-year traffic increases in more than three years.
The company also posted a narrowed net loss of $15.2 million, or 72 cents per share, for the quarter ended Dec. 27, versus a loss of $68.2 million, or $3.34 per share, in the same quarter a year ago. The improvement was mostly because of year-ago charges, when O’Charley’s booked more than $60 million in impairment for goodwill and restaurant closures.
Latest-quarter revenue declined 6.9 percent to $188.9 million, the result of consumers cutting back on spending, O’Charley’s officials said. The company, which operates or franchises 368 restaurants under the O’Charley’s, Stoney River Legendary Steaks and Ninety Nine Restaurants casual-dining brands, had expected sales of between $190 million and $195 million.
“Given the economic environment, this past year was one of the most challenging in the recent history of the casual-dining industry,” said Jeffrey D. Warne, president and chief executive.
Still, the company was able to post traffic increases from a year ago. While same-store sales stores slid 7.3 percent at corporate O’Charley’s units, declined 6.5 percent at Ninety Nine restaurants and plummeted 10.3 percent at Stoney River, guest counts increased 0.2 percent at the O’Charley’s chain and 9.6 percent at Stoney River — the first increases in four year and three years, respectively.
“We increased our focus on driving guest counts through innovative and value-oriented food and beverage offerings, and our guests responded,” Warne said.
New combo meals, for example, were introduced at O’Charley’s and Ninety Nine, and price reductions were taken at Stoney River.
For fiscal 2009, the company booked a net loss of $7.3 million, or 35 cents per share, versus a net loss of $132.5 million, or $6.34 per share. Fiscal 2009 revenue fell 5.4 percent from a year earlier, to $880.8 million.
The company said it expects both economic conditions and consumer spending to gradually improve throughout 2010. Officials forecasted first-quarter revenue of between $276 million and $282 million and income from operations ranging between $6 million and $9 million. No new corporate restaurant development is planned for the year.
Contact Elissa Elan at [email protected].