SCOTTSDALE Ariz. P.F. Chang’s China Bistro Inc. reported today a second-quarter profit increase of 1.3 percent despite lower-than-expected revenue gains and negative same-store sales at both the P.F. Chang’s China Bistro and Pei Wei Asian Diner chains.
Afocus on controlling costs and improving unit-level margins helped the company report profit of $9.4 million, or 39 cents per share, for the quarter ended June 29, compared with earnings of $9.3 million, or 36 cents per share, a year ago.
Net income in both quarters also included losses linked to the closure of P.F. Chang’s lone Taneko Japanese Tavern, which the company opened in October 2006 in an attempt to develop an Asian concept patterned after the neighborhood grills of Japan.
P.F. Chang’s spokeswoman Laura Cherry said Fox Restaurant Concepts agreed to take over the restaurant’s lease and plans to convert the site to one of Fox’s brands, which include North, Olive & Ivy and the Sauce pizza chain.
P.F. Chang’s revenues in the quarter, which ended June 29, increased 14 percent to $304.1 million. Sales at the 182-unit P.F. Chang’s China Bistro were $231.8 million, up 11.3 percent from the same quarter last year. Same-store sales at the chain, however, fell 2.3 percent, the company said. Increased menu prices and menu mix changes increased the check average by between 4 percent and 5 percent, the company added, which implies negative guest traffic at the casual-dining brand.
Sales at the 159-unit Pei Wei totaled $72.1 million, up 23 percent from last year. Same-store sales, however, were down 3.2 percent. Like it’s casual-dining sister brand, the fast-casual Pei Wei reported a 4-percent to 5-percent increase in check averages, which implies negative guest traffic.
During the second quarter the company opened five new Bistro restaurants and four new Pei Wei restaurants. The sale of Taneko assets is expected to close on Aug. 1.
Taneko, which was a prototype for an intended chain, was closed about three months after P.F. Chang’s disclosed that an attempt to sell a controlling interest had fallen through. The agreement had been struck with Dallas restaurateur Jack Baum, who said at the time that he planned to open other branches. The transaction was called off for undisclosed reasons.
Citing improved operating results, P.F. Chang’s increased its per-share earnings expectations for the year by 2 cents to a range between $1.36 and $1.40. A year ago, it earned $1.36 per share.
The company plans to open a total of 17 new Bistro restaurants and 25 new Pei Wei restaurants during the remainder of this year and expects full year fiscal 2008 consolidated revenues to increase between 12 percent and 13 percent from last year. For fiscal 2009, P.F. Chang’s said it would reduce its development schedule because of the “current macroeconomic environment.” It plans to open between 12 and 14 Bistro restaurants and between six and 10 Pei Wei units.
