Morton's Restaurant Group 1st-quarter profit falls by half
CHICAGO—Morton's Restaurant Group Inc. said Wednesday its first-quarter profit fell by more than half, as costs rose and fewer customers visited their upscale steakhouses due to the slowing economy.
However, the results beat Wall Street expectations, and shares edged higher in after-hours trading.
Net income slipped 53 percent to $2.4 million, or 14 cents per share, from of $5 million, or 29 cents per share, in the comparable period last year.
Revenue increased 6.2 percent to $94.4 million from $88.9 million. The company said the increase reflected a shift in its fiscal calendar that pushed New Year's Eve into the first quarter, and the addition of six new restaurants since the year-ago period.
Analysts polled by Thomson Financial, on average, expected profit of 12 cents per share on revenue of $92.1 million.
Sales at restaurants open at least a year, or same-restaurant sales, rose 0.7 percent from the 2007 first quarter, largely due to the New Year's Eve shift. Excluding the first day of both periods, same-restaurant sales slipped 2.1 percent in the 2008 period, Morton's said.
Same-restaurant sales are an important performance indicator because they measure sales at existing locations rather than newly opened ones.
Chairman and Chief Executive Thomas J. Baldwin said rising operating costs also hurt quarterly results. Food costs rose 4 percent to $31.3 million, while restaurant operating costs jumped 12.6 percent, to $45.8 million. Selling, general and administrative expenses leaped 32 percent to $7 million, and marketing expenses shot up 30 percent, to $1.9 million.
The per-share results reflect a 2 percent reduction in the number of outstanding shares in the 2008 quarter. During the quarter, the company announced plans to repurchase of a total of $10 million of its stock. Through April 29, approximately $6.3 million was purchased.
Morton's also offered guidance for its fiscal second quarter in a range that included analyst expectations. Its full-year guidance range was mostly above analyst estimates.
In aftermarket electronic trading, Morton's shares rose 11 cents to $8.10. They earlier fell 4 cents to close regular trading at $7.99.
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