NASHVILLE, Tenn. J. Alexander's Corp., operator of the namesake casual-dining chain, reported a 34-percent rise in net income on a 4.2 percent rise in revenues for the second quarter, but warned of a possible slowdown for the remainder of the year.
Lonnie J. Stout II, J. Alexander's chairman, president and chief executive officer, cited softer sales at the beginning of the third quarter in explaining his caution about the remainder of 2007. He also noted that restaurant margins continue to be squeezed by rising costs. Many casual dining chains similarly have reported their sales being dampened by high fuel prices, rising mortgage rates and uncertainty about home values, as oil costs push up food and utility costs.
J. Alexander's raised its menu prices by 1 percent during the first half of 2007, leaving menu charges as of July about 3.9 percent above the prices of a year-ago, Stout indicated. He said he is hesitant to raise prices again due to continued cost pressures on the consumer.
For the second quarter, net income jumped 34 percent to $953,000, compared with the $711,000 posted a year earlier. Revenues increased 4.2 percent to $34.7 million, up from $33.3 million. Average weekly same store sales rose 4.3 percent, primarily due to a 7-percent increase in the chain's average guest check.
The company also said it expects to incur significant pre-opening expenses in the final half of 2007 for restaurants under development in Florida and Georgia. The units are scheduled to open in the fourth quarter. New restaurants are also planned for Scottsdale, Arizona and Jacksonville and Orlando, Florida in 2008.
J. Alexander's currently operates 28 restaurants in Alabama, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan, Ohio, Tennessee and Texas.
