California Pizza Kitchen Inc. (CPKI) recently reported third-quarter 2009 results with a mid-single digit fall in the top-line but a surprise double-digit rise in the bottom-line. Effective cost management and a lower tax rate have driven earnings growth.  The quarterly earnings of 24 cents a share surpassed the Zacks Consensus Estimate by a penny, jumping 20% from 20 cents posted in the prior-year quarter. The casual dining operator now expects fourth-quarter 2009 earnings in the range of 16 cents to 18 cents a share.  California Pizza Kitchen continues to experience fall in the top-line. After declining 2.2% and 3.2% year-on-year in the first and second quarters, respectively, total revenue dipped 5.3% to $164.8 million in the quarter under review.  Restaurant sales slipped 5.7% to $161.2 million, royalties from the Kraft licensing agreement soared 35.2% to $2.5 million, domestic franchise revenue fell marginally by 1% to ...

For Immediate Release

Chicago, IL – November 9, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Red Robin Gourmet Burgers Inc. (RRGB), Darden Restaurants Inc. (DRI), Brinker International Inc. (EAT), Cosi Inc. (COSI) and Tower Group Inc. (TWGP).

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Here are highlights from Friday’s Analyst Blog:

Red Robin Fails to Lure Diners

Red Robin Gourmet Burgers Inc. (RRGB), the casual dining restaurant operator, recently reported dismal third-quarter 2009 results. The quarterly earnings of 37 cents per share missed the Zacks Consensus Estimate by a penny and fell

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Red Robin Gourmet Burgers Inc. (RRGB), the casual dining restaurant operator, recently reported dismal third-quarter 2009 results. The quarterly earnings of 37 cents per share missed the Zacks Consensus Estimate by a penny and fell 17.8% from 45 cents posted in the prior-year quarter.

Total revenue tumbled 10.4% year-over-year to $187 million, as cash-strapped consumers are either trading down to quick-service restaurants or preferring to eat at home, leading to fall in traffic and same-store sales.

Same-store sales fell 14.9% for company-operated restaurants, driven by a 13.8% decline in guest counts and a 1.1% fall in the average guest check. Management expects guest count to decline in fiscal year 2009. Same-store sales for franchised restaurants in the U.S. dropped 14.4% and franchised restaurants in Canada fell 0.2%.

Other operators in the casual dining segment are Darden Restaurants Inc. (DRI), Brinker International Inc. (EAT) and Cosi Inc. (COSI).

Red Robin's

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Despite a turbulent economy and rising unemployment, BJ’s Restaurants, Inc. (BJRI) sustained its growth momentum in fiscal year 2009. The casual dining operator’s third-quarter 2009 profit soared 55.3% year-over-year to $3.2 million. BJ’s quarterly earnings of 12 cents a share jumped 50% from 8 cents delivered in the prior-year quarter, but missed the Zacks Consensus Estimate by a penny. The result for the quarter benefited from a 44.6% decline in restaurant opening costs due to the opening of two restaurants in the quarter as against six opened in the prior-year quarter. Revenue for the quarter also climbed 8.5% to $103.9 million. Restaurant operating cash flow rose 18.4% to $19 million, whereas restaurant operating cash flow margin expanded 150 basis points to 18.3% but narrowed 60 basis points sequentially. With about 89 restaurants, management believes the system can support at least 300 restaurants with ample ...

Brinker International, Inc. (EAT), the operator of Chili's Grill & Bar, On The Border and Maggiano's restaurants, recently reported first quarter 2010 results, registering a double-digit decline in both top and bottom lines. Despite lower operating expenses, fall in interest expense and lower effective tax rate, adjusted net profit for the quarter dropped 15% year-on-year to $17.5 million on account of fall in revenue.  Total revenue slipped 21% to $778.1 million due to a 6% decline in comparable restaurant sales and an 18.6% fall in restaurant capacity due to the sale of 198 restaurants and the closing of 49 restaurants since the first-quarter 2009. In the second-quarter 2009, Brinker sold the Macaroni Grill restaurants (which were 189 of the total restaurants sold) to a private-equity firm Golden Gate Capital for $88 million, keeping a minority stake of nearly 20%.  Brinker’s quarterly earnings of 17 cents a ...

For Immediate Release

Chicago, IL – October 20, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Restaurants sector, including BJ’s Restaurants Inc. (BJRI), Darden Restaurants Inc. (DRI), Buffalo Wild Wings Inc. (BWLD), McDonald’s Corporation (MCD) and Chipotle Mexican Grill Inc. (CMG).

Here is the latest on the Restaurants sector:

In the midst of what is expected to be a tepid recovery, there are three potential drivers of net income growth: Unit Expansion, Improved Same-Store Sales and Cost Cuts.

There seems little chance that upside will come from more aggressive unit expansion, as most of the companies have either scaled back or postponed further unit development. BJ’s Restaurants Inc. (BJRI) plans to grow the unit base by 12% in fiscal year 2009, much lower than 21% achieved in fiscal year 2008.

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The Restaurant Industry has been facing extremely tough challenges due to the ongoing economic turmoil. With rising unemployment and lower discretionary spending, we believe it will be too early to predict improvement in the industry, which is grappling with sluggish consumer demand. Although the current economic indicators show some signs of improvement, we believe that job losses will continue to adversely impact the restaurant industry even several months after the recovery is on track. The U.S. restaurant industry, which constitutes fast food, casual dining and upscale chains, is facing its toughest times in three decades. A report by market research firm, NPD Group asserted that U.S. restaurant guest traffic plunged 2.6% for the quarter ended May 31, the steepest fall in 28 years. However, the quick-service restaurants (traffic down 2%), which are generally less susceptible to an economic downturn, are faring better than casual dining restaurant ...

Luby’s, Inc. (LUB), the casual dining restaurant operator, recently reported fourth-quarter 2009 results. The company reported quarterly loss of 20 cents a share compared to a loss of 13 cents reported in the prior-year quarter. The loss per share was in-line with the Zacks Consensus Estimate. Restaurant sales tumbled 14.7% year-on-year to $80.2 million, whereas Culinary Contract Services jumped 33.8% to $4 million. The rise in Culinary Contract Services was due to the operation of 15 facilities in the reported quarter compared to 10 facilities in the prior year quarter. Same-store sales fell 13.6% in the quarter -- the sharpest decline registered by the company in fiscal year 2009, due to a fall in traffic counts. Store level profit dipped more than 50.0% to $4 million, whereas store level profit margin shrank 400 basis points to 5.0%. The rise of 30 basis points in food ...

California Pizza Kitchen, Inc. (CPKI), a leading casual dining restaurant chain, recently raised its third quarter 2009 earnings outlook on the back of operating efficiencies and a lower tax rate that helped offset falling top-line. Management now expects third quarter earnings in the range of 22 cents to 24 cents a share, up from 19 cents to 21 cents a share predicted earlier.  The Zacks Consensus Estimate for the quarter is 21 cents. California Pizza Kitchen registered a decline of 5.3% year-on-year in revenue to $164.8 million in the quarter from $174 million reported in the prior-year quarter. The restaurant chain also experienced a steep decline in comparable restaurant sales, than it had expected for the quarter.  Comps fell 8.0% in the third quarter of 2009 compared to a 2.4% drop posted in the year ago quarter. Management had earlier forecasted comps to decline in the ...

Darden Restaurants, Inc. (DRI) recently reported better-than-expected first quarter 2010 results. Despite a low-single digit fall in the top-line, the company posted a double-digit growth in the bottom-line. Darden’s quarterly earnings of 67 cents a share surpassed the Zacks Consensus Estimate of 65 cents, and climbed 15.5% from 58 cents reported in the prior-year quarter. Lower food and beverage costs (down 8.5% year-on-year) and fall in restaurant expenses (down 7.2%), partially offset by rise in labor costs (up 1.7%) and higher depreciation and amortization expenses (up 6.0%) drove the earnings. Management expects earnings per share (EPS) for the fiscal year 2010 in the range of $2.59 to $2.85. However, Darden added that given the macro-economic conditions, its earnings could be at the lower end of its forecast. Revenue for the quarter slipped 2.3% to $1,734 million, as blended comparable restaurant sales fell 5.3%. However, ...