NASHVILLE Tenn. Credit ratings for casual-dining company O’Charley’s Inc. were cut by Standard & Poor’s Ratings Services on the expectation of sales and profit declines for the remainder of the year, according to an S&P report released this month.
O’Charley’s, the operator or franchisor of 369 restaurants under the O’Charley’s, Ninety Nine Restaurant, and Stoney River Legendary Steaks brands, has reported softening sales and earnings results so far this year, like many in the casual-dining segment.
S&P credit analyst Charles Pinson-Rose said the downgrade — which moved O’Charley’s ratings further into non-investment grade territory — reflected “the strong possibility that the sales and profitably declines in the past three quarters, which have weakened [O’Charley’s] credit metrics, will continue through the balance of the year and likely into 2009.”
Last month O’Charley’s reported a wider net loss of $7.8 million for its second quarter ended in July, versus a loss of $1.1 million in the year-ago quarter. Revenues fell 3.3 percent to $221.1 million and same-store sales fell 1.4 percent at O’Charley’s corporate restaurants, 3.1 percent at the Ninety Nine chain and 6.4 percent at Stoney River.