Morton's expects big sales slump in 1Q

CHICAGO Morton’s Restaurant Group Inc. said it expects a first-quarter same-store sales decline of between 20 percent and 22 percent, as the fine-dining steakhouse operator faces declining guest traffic amid an era of consumer cutbacks.

The company, which operates 81 Morton’s steakhouses and three Italian restaurants, said the reduced sales would lead to a per-share net loss for the current quarter of between 6 cents and 10 cents. In the first quarter of 2008, Morton’s posted profit of 14 cents per share.

The company, like many high-end operators in the industry, has struggled to maintain guest traffic as consumers cut back spending on dining out amid the domestic recession. Morton’s has worked to entice customers with lower-priced fare and a more relaxed atmosphere through its Bar 12-21 concept, which features smaller bar bites and drink specials. The chain also has attempted to expand its daypart service via Morton’s By Day, which caters to lunch or breakfast meetings.

Its efforts, however, were outmatched by economic trends, and fourth-quarter same-store sales fell 12 percent. Without a sales gain from an added week and from New Years Day, same-store sales in the latest quarter, which ended Jan. 4, would have dropped 17.9 percent.

The company posted a net loss of $8.1 million, or 51 cents per share, compared with a profit of $6.4 million, or 38 cents per share, in the same quarter a year earlier. Latest-quarter results included $10.4 million in impairment charges and $2.3 million for the settlement of wage and hour claims.

Revenues for the latest fourth quarter fell 7 percent to $93.5 million.

Contact Sarah E. Lockyer at [email protected] [3].