SCOTTSDALE Ariz. P.F. Chang's China Bistro Inc., operator of the namesake casual-dining chain and the fast-casual Pei Wei Asian Diner, reported a 38-percent increase in first-quarter profit as cost controls offset sales declines at both its concepts.
The company also boosted its full-year profit guidance because of expected improvements to operating margins. P.F. Chang's stock surged more than 20 percent on the news to close Wednesday at $32.54.
For the quarter ended March 29, the company reported net income of $13.3 million, 56 cents per share, compared with $9.6 million, or 41 cents a share, in the same period last year. Revenues in the quarter rose 1.4 percent, to $309.8 million.
First-quarter same-store sales fell 6.6 percent at its namesake Bistro concept and 2.2 percent at Pei Wei Asian Diner, the company reported.
P.F. Chang's said it expected sales to continue to fall at both concepts because of poor economic conditions. However, the company cited "incremental operational improvement opportunities" as it increased its profit guidance for the year. P.F. Chang's said it now expects full-year earnings from continuing operations to range between $1.45 and $1.50 a share. Earlier this year, the company had estimated that full-year income from continuing operations to fall 20 percent to around $1.16 a share.
P.F. Chang’s has scaled back expansion plans over the past year. During the first quarter, the company opened one new Bistro and one new Pei Wei. In fiscal 2009, the company said it expects to open eight Bistro restaurants and six Pei Weis.
The company is planning to expand overseas and on Tuesday announced a development and license agreement with M.H. Alshaya Co. of Kuwait to develop 34 restaurants in the Middle East over the next 10 years. The first location is expected to open in Kuwait City by the end of this year, and a second will open in Dubai in the first quarter of 2010. Other sites include Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Lebanon, Jordan and Oman.
At the end of the quarter, P.F. Chang's system included 190 namesake restaurants and 160 Pei Wei fast-casual units.