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McCormick & Schmick’s: We won’t chase lower-income guests

PORTLAND , ORE. McCormick & Schmick’s Seafood Restaurants Inc. cut its third-quarter earnings expectations by as much as one-third, citing weak traffic in September, mainly due to fewer visits from the concept’s “aspirational,” or lower-income, guests. —

Yet the upscale seafood chain that boasts 72 namesake locations indicated it would not attempt to win back those lapsed users and would instead focus on higher-end consumers who spend more. —

According to a report from Thomas Weisel Partners restaurant analyst Matthew DiFrisco, McCormick & Schmick’s has said that the aspirational consumer typically accounts for 10 percent to 15 percent of sales at individual restaurants. —

Still, “rather than chase the aspirational consumer down the restaurant value chain, McCormick & Schmick’s is focusing on attracting the business and higher-end consumer through national advertising and higher-priced promotions,” DiFrisco said. —

McCormick & Schmick’s said late last month that it now anticipates third-quarter corporate revenue to total about $88 million, same-store sales to be flat versus a year ago and per-share earnings to total 16 cents. Those expectations compare with the company’s earlier guidance of between $90 million and $91 million in revenue, a same-store sales increase of between 1.5 percent and 2.5 percent, and per-share earnings of between 21 cents and 23 cents. —

“Our updated third-quarter outlook reflects weakness in September traffic, which we attribute primarily to less demand from our aspirational guest, as a result of economic pressures currently affecting this segment of the U.S. consumer base,” Doug Schmick, chairman and chief executive, said in a statement. —

McCormick & Schmick’s reported that same-store sales during the third quarter were flat in July, up 2.5 percent in August and then dipped for the first three weeks in September. The company, which also operates five Boathouse restaurants in Canada, will report full third-quarter results in November. —

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