PORTLAND Ore. Despite a net loss and a double-digit same-store sales decline in its first quarter, McCormick & Schmick’s Seafood Restaurants Inc. upgraded Wednesday its full-year outlook as the company expects to gain traction with cost-cutting initiatives and tax benefits later this year.
For the first quarter ended March 28, the Portland, Ore.-based company reported a net loss of $1.1 million, or 8 cents per share, compared with a profit of $0.1 million, or 1 cent per share, in the prior-year quarter.
Revenues were down 0.5 percent to $91.9 million. Same-store sales fell of 13.9 percent, a slightly larger drop over the preceding fourth quarter’s slide of 13.5 percent.
However, Bill Freeman, McCormick and Schmick’s chief executive, predicted the picture will improve in the second and third quarters for the 94-unit chain, which includes 88 namesake restaurants and six locations in Canada under The Boathouse brand.
“During the first quarter of this year, we have focused on implementing aggressive cost control initiatives to help mitigate the impact of this challenging economic environment,” he said. “I am pleased with the initial results of these initiatives and the effect they have had on our financial results for the quarter.”
The company affirmed its annual revenue guidance of about $370 million, assuming a 13 percent same-store-sales decrease for the year. Its per-share earnings guidance was increased to about 25 cents to 30 cents, compared with the previously announced guidance of 20 cents.
Company officials expect to benefit from a lower annualized effective tax rate of between 5 percent and 10 percent for the full year, primarily because of reserved FICA tax credits and operating loss carryforwards that reduce the company’s tax liabilities.
McCormick and Schmick’s opened two restaurants during the first quarter, in Roseville, Calif., and St. Louis, Mo., and, depending on the availability of capital and economic conditions, another new opening is possible before the end of the fiscal year, though there are no current plans, officials said.