Benihana Q2 Revenues Decline, Posts Net Loss Of $0.8m
Withdraws fiscal 2010 outlook
Benihana, an operator of Japanese theme and sushi restaurants, has reported revenues of $69.3m for the second quarter of fiscal 2009, a decrease of 0.9% compared to $70m in the same quarter previous year. Total restaurant sales for the quarter was $69m compared to $69.6m for the previous year quarter.
Company-wide comparable restaurant sales for the fiscal second quarter 2010 were 9.9%, including 12.2% at Benihana teppanyaki, 0.2% at RA Sushi, and 14.3% at Haru.
Restaurant operating profit for second quarter was $4.7m or 6.8% of restaurant sales, compared to $9m or 12.9% of restaurant sales in the same quarter prior year. Loss from operations was $1.9m compared to income from operations of $3.4m in the prior year quarter. Net loss for the quarter was $0.8m or $0.07 in diluted loss per share compared to net income of $2m or $0.11 in diluted earnings per share in the same quarter last year.
The company completed its company-owned development plans for fiscal year 2010 with the opening of a RA Sushi restaurant in Leawood, Kansas during the fiscal second quarter. In addition, during the fiscal third quarter 2010, a new franchise partner is scheduled to open the first Benihana teppanyaki restaurant in Buenos Aires, Argentina.
Richard Stockinger, chief executive officer of Benihana, said: In the fiscal second quarter, we experienced a lower than expected comparable sales trend which pressured our operating margins. Additionally, we launched our Benihana Teppanyaki Renewal Program, which is focused on improving guest perceptions as they relate to image, quality, consistency, and lack-of-Japan.
“The decline in sales, its impact on operating margins, and incremental cost increases associated with the Renewal Program negatively impacted our results, and we failed to meet the leverage ratio required under our credit agreement with Wachovia. That agreement has now been amended.”
The company said that the continuing uncertainty in the current economic environment, and the impact on operations stemming from the implementation of the Benihana Teppanyaki Renewal Program, has obscured its ability to forecast results for the remainder of the fiscal year with sufficient confidence. The company has therefore withdrawn the guidance previously provided for fiscal 2010.
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