O’Charley’s Inc. narrowed its loss in the third quarter, the company said Thursday.
O’Charley’s, which operates the O’Charley’s, Ninety Nine Restaurants and Stoney River Legendary Steaks brands, reported a net loss for the quarter ended Oct. 2 of $4 million, or 19 cents per share, compared with a loss of $7.4 million, or 35 cents a share, for the same period last year.
Revenue for the recent 12-week period — during which the company operated 12 fewer restaurants — decreased slightly to $186.6 million from $188.6 million from the year-earlier period.
Same-store sales at O’Charley’s company-operated restaurants dipped 0.9 percent for the third quarter. However, a 4.5-percent decline in guest counts was partly offset by a 3.8-percent boost in average check, the company said.
At Ninety Nine Restaurants, same-store sales rose 4.1 percent for the quarter, due to a 4-percent rise in guest counts and a 0.1-percent increase in the average check.
Stoney River Legendary Steaks also saw same-store sales increase 6.8 percent in the quarter, fueled by a 6.1-percent rise in guest counts and a 0.6 percent-hike in the average check. That marks the brand’s first quarterly improvement in the last 10 quarters.
In October, O’Charley’s completed a sale-leaseback agreement for 50 O’Charley’s outlets, which generated $105 million.
“We did not sustain the positive comparable sales momentum created at O'Charley's over the previous four quarters,” said David W. Head, president and chief executive of O'Charley's Inc. “The decline in O'Charley's guest counts compares to a 2.7-percent increase in guest counts for the third quarter last year, which was driven by the re-launch of the ‘2 Meals for $14.99’ promotion. Although new, high quality menu introductions produced upward migration in guest satisfaction for O'Charley's for the third quarter, we believe the promotion mismatch coupled with heightened economic uncertainty contributed to the decline in guest counts.”
He said the company is “using the substantial guest count and sales progress in two of our three concepts as a blueprint to regain momentum in our O'Charley's concept. We have undertaken several initiatives designed to grow O'Charley's guest counts that center on greater clarity and precision in communicating our message of high quality, flavorful food at an everyday value. We intend to keep our focus on improving the guest experience at all three of our concepts.”
The company said it expects total revenues for the fourth quarter of 2011 to be between $177 million and $182 million.
Nashville, Tenn.-based O’Charley’s Inc. has 227 O’Charley’s locations, 105 Ninety Nine outlets and 10 Stoney River Legendary Steaks units.
Contact Paul Frumkin at [email protected].