NASHVILLE Tenn. O’Charley’s Inc., parent to 372 casual-dining restaurants under the O’Charley’s, Stoney River Legendary Steaks and Ninety Nine Restaurants chains, said Tuesday that profits for the first quarter fell 31 percent, the result of a continued drop-off in consumer spending.
Still, the company's earnings were better than expected, especially by Wall Street, and O'Charley's stock price rose nearly 26 percent to close at $8.49 on Tuesday. For the past 52 weeks the stock had traded as high as $12.84 and as low as $1.19.
O’Charley’s, like many of its casual-dining peers, had faced a severe decline in guest traffic and had to look to cost cutting to shore up results, including employee cuts at its support centers, frozen salaries and a redesigned hourly benefits programs. O’Charley’s chains also cut menu prices and instituted value meal programs to drive traffic, with price points as low as $7.99 at O’Charley’s, four entrees for $9.99 at Ninety Nine and coupons for $5 or $10 off.
Earnings for the quarter ended April 19 decreased to $6.9 million, or 34 cents per share, compared with year-earlier results of $10 million, or 46 cents per share. Wall Street analysts had expected the company to post a loss of 1 cent per share.
Latest-quarter revenue fell 2 percent to $291.7 million.
Same-store sales declined 2.9 percent at O’Charley’s corporate stores, 4.5 percent at Ninety Nine Restaurants, and 17.2 percent at Stoney River.
The company’s restaurant margins improved year over year because of declines in food and beverage costs, improved controls over labor scheduling, reductions in the cost of employee benefit plans and reductions in other restaurant operating costs, the company said.