NEW YORK —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
McCormick & Schmick’s Seafood Restaurants Inc. and Morton’s Restaurant Group Inc. are among the latest companies to report that lower traffic and resulting double-digit dips in same-store sales drove year-over-year declines in second-quarter revenue and profit. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
Though McCormick & Schmick’s of Portland, Ore., is known for seafood and Chicago-based Morton’s for Prime beef, the two high-end casual-dining operations shared some challenges in the latest quarter. Morton’s, operator of the Morton’s The Steakhouse chain, exhibited the greater struggle, however, as it reported this month a loss for the quarter and greater erosion in same-store sales. McCormick & Schmick’s was able to maintain a profit, albeit a much lower one than a year ago. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
The results followed a quarterly report released last month from high-end operator Ruth’s Hospitality Group Inc., which also included double-digit declines in sales and profit. In addition, high-end seafood operator The Oceanaire Inc., which runs 12 locations of The Oceanaire Seafood Room, filed for Chapter 11 bankruptcy protection in early July and closed four locations. The sector has taken severe traffic hits not only from consumers that have tightened spending, but also from corporate clients that have cut back on travel and entertainment expenses, scaling back on the lavish events that used to help finer-dining establishments. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
“Corporate travel [and] spending remains weak, which supports our ‘stay-on-the-sidelines’ thesis in terms of the fine-dining-centric operators,” said securities analyst Nicole Miller Regan at Piper Jaffray. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
For the second quarter ended June 27, McCormick & Schmick’s net income fell 49.6 percent from the same quarter a year ago to $1.2 million, or 8 cents per share. The company’s revenue fell 7 percent to $92.7 million. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
At the end of the quarter McCormick & Schmick’s operated 87 namesake restaurants in the United States and six Boathouse units in Canada. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
McCormick & Schmick’s officials said quarterly same-store sales declined 17.3 percent, reflecting a 16.7-percent decrease in guest traffic and a 0.6-percent drop in net pricing. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
“While the challenging economic environment resulted in a decrease in comparable sales for the quarter, we are pleased with the impact our cost savings initiatives have had on our operating results,” chief executive Bill Freeman said. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
He added that he was “encouraged by the evolution of our marketing strategy as we focus on communicating to a broader audience to strengthen our connectivity to our guests.” —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
For the first half of fiscal 2009, McCormick & Schmick’s revenue was $184.6 million, down 3.9 percent from the same six months in 2008. Net income totaled $44,000, or nil cents per share, down from year-ago profit of $2.5 million, or 17 cents per share. Company officials said same-store sales fell 15.7 percent for the first 26 weeks of the year. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
McCormick & Schmick’s reaf-firmed its full-year guidance of $370 million in revenue and earnings per share of between 25 cents to 30 cents. For fiscal 2008, the company booked revenue of $390.7 million and a net loss of $69.6 million, or $4.73 per share. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
At Morton’s, executives said same-store sales fell 26.1 percent in the second quarter ended July 5, a result that drove a decrease of 19.8 percent in quarterly revenue to $68.7 million. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
The company had a net loss of $6.5 million, or 41 cents per share, versus year-ago second-quarter net income of $1.7 million, or 11 cents per share. The latest quarterly loss included a charge of $6.7 million, or 42 cents per share, related to an earlier announced settlement of a labor dispute. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
Morton’s closed three steakhouses in June, ending the quarter with 81 restaurants, including 75 domestic and six foreign branches. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
For the first half of fiscal 2009, Morton’s revenue fell 18.9 percent to $143 million. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
Officials said same-store sales dipped 24.9 percent. Its net loss totaled $8.6 million, or 54 cents per share, compared with earnings of $4.1 million, or 25 cents a share, in the first half of 2008. —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.
Morton’s said it expects same-store sales to fall between 10 percent and 12 percent in the third quarter, and drop between 16 percent and 18 percent for the year.— [email protected] —High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.