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P.F. Chang's predicts weak sales after tough 4Q

SCOTTSDALE Ariz. P.F. Chang’s China Bistro Inc. expects 2009 corporate sales to remain flat from 2008 and income from continuing operations to fall by 20 percent as the restaurant operator continues to report declining customer traffic.

The company, which operates 348 restaurants under the namesake casual-dining chain and the fast-casual Pei Wei Asian Diner brand, said Wednesday it expected a “significant reduction” in average weekly sales through 2009, with an estimated drop of 6 percent at both chains. The loss of sales will reduce margins by at least 150 basis points, or 1.5 percent, the company said.

For the December-ended fourth quarter, P.F. Chang’s said profit fell to $5.4 million, or 23 cents per share, on negative same-store sales and the closures of 10 underperforming Pei Wei restaurants. In the same quarter a year earlier, the company earned $7.0 million, or 28 cents per share.

The 10 Pei Wei closings led to a $2.7 million charge in the latest quarter for lease terminations and severance. Fourth-quarter income from continuing operations totaled $7.5 million, a drop of 22.3 percent from the same quarter a year earlier.

Latest-quarter corporate revenue rose 1.9 percent to $294.8 million aided by 11 new restaurants. Sales at the 189-unit Bistro division totaled $225.4 million, compared with $226.0 million in the prior-year quarter, and sales at the 159-unit Pei Wei division totaled $69.3 million, up from $63.4 million in the same quarter a year earlier.

Fourth-quarter same-store sales fell 7.1 percent at the Bistro concept and 6.1 percent at Pei Wei.

The company said it has reduced its 2009 restaurant development plans and expects to open between four and six new Bistros and between two and four new Pei Wei units this year.

For the full year, P.F. Chang’s earned $27.4 million, or $1.14 per share, on revenues of $1.2 billion. In fiscal 2007, the company earned $32.1 million, or $1.24 per share, on revenues of $1.1 billion.

Contact Ron Ruggless at [email protected].

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