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Benihana's 1-Q profits dip on higher costs

MIAMI Restaurant development costs, renovation expenses and investments in infrastructure ate into strong sales at Benihana Inc., leading to a dip in first-quarter profit compared with the same quarter a year ago.

Benihana, which operates or franchises 99 restaurants under three brands, reported net income of $4.2 million, or 25 cents per share, for its first quarter of fiscal 2008 ended July 22, compared with earnings of $4.5 million, or 26 cents per share, a year ago. The company said restaurant opening costs nearly doubled year-to-year and that marketing, general and administrative expenses rose 24.5 percent in the latest quarter as the company ramps up support and management functions for its larger restaurant base. A year ago, the company had operated or franchised 88 restaurants. Also within the past year, Benihana has remodeled at least 12 namesake teppanyaki units.

First-quarter revenue increased 12.6 percent to $89.9 million, aided by same-store sales gains of 6.2 percent at the teppanyaki chain, 4.4 percent at the company’s RA Sushi brand, and 10.3 percent at the Haru concept.

Company chairman and chief executive Joel A. Schwartz cited the “unique nature of [the] Benihana teppanyaki experience and the popularity of Asian cuisine in general” as drivers behind the company’s positive same-store sales.

For the full fiscal 2008, Benihana said it expects the opening of two teppanyaki restaurants, six RA Sushi restaurants, and two Haru restaurants as well as the completion of 17 Benihana teppanyaki remodels.

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