Benihana books smaller 4th-Q profit as tough economy takes toll

MIAMI Benihana Inc. reported a 29-percent tumble in its fiscal 2008 fourth quarter profit as higher restaurant opening costs, soft sales and one fewer operating week ate into the multiconcept operator's bottom line.

For the 12-week quarter ended March 30, Benihana reported net income of $2.9 million, or 17 cents per share, compared with $4.1 million, or 23 cents per share, in last year's 13-week fourth quarter. Revenue for the latest quarter fell 2 percent to $70. 2 million, compared with $71.6 million in the year-ago period.

Benihana, which operates or franchises 107 Japanese-theme restaurants under three brands, said the additional week in last year's fourth quarter accounted for $5.5 million in restaurant sales. Excluding that week, fourth quarter revenue would have been up 6.2 percent over last year, company officials said.

Overall same-store sales fell for the quarter fell 2.2 percent, Benihana said, as "guests were challenged in the current environment." The drop included same-store sales declines of 0.6 percent at the company's namesake teppanyaki chain, 8.4 percent at RA Sushi and 2.9 percent at Haru.

Benihana said its fourth quarter results also were hurt by a 63-percent surge in restaurant opening costs and a 10-percent increase in general and administrative costs.

For the fiscal year ended March 30, Benihana reported a 12-percent decline in net income to $12.8 million, or 75 cents per share, versus $14.5 million, or 84 cents per share, a year ago. Revenues for the fiscal year ended March 30 increased 8.9 percent to $296.9 million, versus $272.6 million for the prior 53-week fiscal year.

Joel A. Schwartz, Benihana’s chairman and chief executive, said the company was stepping up its marketing efforts to emphasize the Benihana experience.”

“While we cannot control the broader economic climate, we are doing our best to navigate through these times, accentuate our strengths and remain true to what has made us so successful and relevant to the dining public for so long,” he said in a statement.

Benihana said it expects to open four namesake teppanyaki restaurants during the current fiscal year and seven RA Sushi restaurants, with the majority of openings scheduled to occur in the second half of the fiscal year. Benihana currently operates 60 namesake units, 19 RA Sushi units and nine Haru units. The company also franchises 19 Benihana restaurants.

Looking forward, Benihana said it expects in the first half of the year to incur $500,000 in accelerated depreciation costs related to the company’s ongoing remodeling program.

Schwartz projected that sales for the current fiscal year would reach $313 million to $318 million. He also projected full-year earnings for fiscal 2009 of 60 cents to 65 cents per share.