The return of business travel and conventions is driving traffic at fine-dining chains, many of which have recently reported positive same-store sales after suffering from empty dining rooms during the recession.
While steakhouse chains including Morton’s, Ruth’s Chris and The Capital Grille have taken advantage of the increased spending among their core markets, the high-end seafood chain McCormick & Schmick’s says it has suffered from the Gulf oil spill, which has kept consumers away.
Morton's Restaurant Group Inc. on Tuesday became the latest upscale player to highlight sales improvement. Its same-store sales rose 7.1 percent at its namesake steakhouse chain for the July 4-ended quarter.
"The slow but continuous improvement of business travel, conventions and entertaining is having a positive impact on our business," the company said. "We are working hard to sustain this positive momentum.”
Morton's follows reports earlier this summer from Ruth's Hospitality Inc., which said same-store sales rose 2.9 percent at corporate Ruth's Chris Steak House locations, and Darden Restaurants Inc., which said its upscale The Capital Grille chain saw same-store sales rise 4.7 percent.
McCormick & Schmick’s Seafood Restaurants Inc., however, on Tuesday lowered its full-year outlook, citing the potential negative impact of publicity from the Gulf oil spill.
Same-store sales fell 4 percent at McCormick & Schmick's for the June 26-ended second quarter, reflecting a traffic drop of 4.6 percent offset slightly by a 0.6 percent increase in net pricing and product mix, the company said.
Bill Freeman, McCormick & Schmick’s chief executive, noted, however, that same-store sales trends had improved sequentially from the first quarter of this year, when same-store sales fell 9.6 percent on a 6.2-percent dip in traffic.
Looking forward, Freeman said he is concerned with “both the economic outlook and publicity centered around the Gulf oil spill and its potential effect on seafood consumption and commodity pricing.”
McCormick & Schmick’s said it now expects full-year revenue to total between $345 million and $355 million and per-share earnings to total between 35 cents and 40 cents, which is down from an earlier forecast of revenue between $355 million and $365 million and per-share earnings between 40 cents and 45 cents.
More earnings highlights:
• Morton's narrowed its second-quarter net loss to $516,000, or 3 cents a share, from a loss of $6.5 million, or 41 cents a share, in last year's second quarter, when the company booked $10.6 million in charges related to a legal settlement. Latest-quarter revenue rose 6.1 percent to $70.5 million.
Chicago-based Morton's operates 76 Morton's steakhouse locations and one Trevi high-end Italian restaurant.
• Portland, Ore.-based McCormick & Schmick’s said second-quarter profit rose to $1.3 million, or 9 cents per share, compared with earnings of $1.2 million, or 8 cents per share in the same quarter a year ago. Revenue fell 3.2 percent to $89.7 million.
McCormick & Schmick’s operates 96 restaurants, including 89 in the United States and seven in Canada under The Boathouse brand.
Contact Molly Gise at [email protected].
Contact Lisa Jennings at [email protected].
