PORTLAND Ore. McCormick & Schmick’s Seafood Restaurants Inc. on Tuesday cut its third-quarter earnings expectations by as much as 7 cents per share on weak traffic results this month, mainly because of fewer visits from the concept’s “aspirational,” or lower-income, guest, the company said.
McCormick & Schmick’s, which operates 72 namesake restaurants, now anticipates third-quarter corporate revenue to total about $88 million, same-store sales to be flat versus a year ago, and per-share earnings to total 16 cents, it said. Those expectations compare with the company’s earlier guidance of between $90 million and $91 million in revenue, a same-store sales increase of between 1.5 percent and 2.5 percent, and per-share earnings of between 21 cents and 23 cents.
“Our updated third-quarter outlook reflects weakness in September traffic, which we attribute primarily to less demand from our aspirational guest, as a result of economic pressures currently affecting this segment of the U.S. consumer base,” Doug Schmick, chairman and chief executive, said in a statement.
McCormick & Schmick’s on Tuesday presented at the Thomas Weisel Partners annual consumer conference in New York, and reported that same-store sales during the third quarter were flat in July, up 2.5 percent in August and then dipped for the first three weeks in September. It will report full third-quarter results in early November.
According to a report from Thomas Weisel securities analyst Matthew DiFrisco, McCormick & Schmick’s has said that the aspirational, or lower-income, consumer typically accounts for 10 percent to 15 percent of sales at individual restaurants. The company is not going to attempt to win these lapsed users back, DiFrisco indicated, and instead will focus on the higher-end consumers who typically spend more at the restaurants.
“Rather than chase the aspirational consumer down the restaurant value chain, McCormick & Schmick’s is focusing on attracting the business and higher-end consumer through national advertising and higher priced promotions,” DiFrisco said.