McCormick & Schmick's shares fall on 1Q profit plunge
NEW YORK—Shares of McCormick & Schmick's Seafood Restaurants Inc. dropped Thursday after the company said its first-quarter profit plunged 96 percent partly due to declining same-store sales.
Its stock, which has ranged between $9.67 and $30.98 over the past 52 weeks, lost $1.46, or 11.7 percent, to $11 in afternoon trading.
After the market closed Wednesday, the company said its net income fell to $118,000, or 1 cent per share, from $3.2 million, or 22 cents per share, in the prior year quarter.
Analysts polled by Thomson Financial expected a higher profit of 13 cents per share.
Costs and expenses jumped 20 percent, with restaurant operating costs rising 19 percent in the period.
Revenue increased 13 percent to $92.3 million from $81.4 million in the first quarter of 2007. Analysts predicted revenue of $93.2 million.
Same-store sales, or sales at locations open at least a year, fell 5.8 percent. Same-store sales is a key indicator of restaurant performance since it measures growth at existing locations rather than newly-opened ones.
The company said the sales decline was partly due to a slowdown in consumer spending and the weak economy, which has led some customers who would normally frequent the restaurant for a nice dinner out or a special occasion to stop eating at the chain.
"We have not had any indication that our aspirational guest will be resuming their previous dining frequency in the near term," said Chief Executive Douglas Schmick.
Oppenheimer & Co. analyst Matthew DiFrisco said in a note to investors that same-store sales will likely continue to decline through 2008 since the company expects its traffic to drop between 6 percent and 7 percent.
"We suspect its aspirational consumer will return when consumer confidence recovers," DiFrisco said.
The company also reiterated its 2008 guidance for profit between 64 cents and 74 cents per share on revenue between $410 million and $420 million. Wall Street expects full-year profit of 69 cents per share on sales of $404.5 million.
McCormick & Schmick's also predicted its same-store sales would fall between 2 percent and 4 percent.
