Harsh weather and flooding in the Midwest forced J. Alexander’s Holdings Inc. to temporarily close some of its restaurants for 14 days, hurting overall sales in the first quarter, the company reported Wednesday afternoon.
The Nashville, Tenn.-based company said it lost about $175,000 in revenue during the first quarter ended March 31 as a result of the weather-related closures. Though guest counts were down at its flagship J. Alexander’s brand, the company still reported year-over-year sales gains.
For the first quarter, the company reported $64.7 million in net sales, up 4.6% from $61.9 million in the same quarter of 2018. Net income of $3.8 million, or 26 cents a share, was up from $1.6 million, or 11 cents a share, for the same period, last year.
J. Alexander’s operates 46 upscale dining concepts including J. Alexander’s, Redlands Grill, Stoney River Steakhouse and Grill, Overland Park Grill and Lyndhurst Grill.
Despite a 1.1% drop in same-store guest counts at the J. Alexander’s/Grill restaurants, the collection eked out a 0.3% gain in same-store sales. The company’s Stoney River Steakhouse and Grill restaurants fared better, reporting a 2.2% gain in same-store sales. Same-store guest counts at Stoney were up 1.2%.
CEO Mark A. Parkey said the company is closely monitoring soft guest traffic trends across all locations, especially markets where new competitors have opened.
“We continue to see new restaurants opening in many of our markets and, while such openings have historically not presented long-term issues, they have the potential to generate short-term trial in selected locations,” he said in a statement.
During a Thursday morning conference call with investors, Parkey said the company is “working diligently” to raise guest counts at new locations through social media campaigns and promotional events.
The company has opened six new restaurants since 2016. Parkey, promoted from chief financial officer to CEO in March, said their restaurants tend to have a slow “ramp up” because 62% of revenue is generated from 16% of guests.
During the call, there was no mention of the company’s recent rejection of a $186 million buyout offer made by investor Ancora Advisors LLC. In April, the company called the offer “too unattractive to entertain.”
The company said it plans to open a new J. Alexander’s restaurant in Houston in the fourth quarter of 2019 and a Redlands Grill in San Antonio in 2020.
Contact Nancy Luna at [email protected]
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