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Sales improve for many restaurants in 3Q

A segment-by-segment look at last week’s reports

Strong reports from large players like Starbucks Corp. and DineEquity Inc. capped off another busy week of third-quarter earnings, which showcased improved sales at many restaurant companies.

The past week also saw latest results from Einstein Noah Restaurant Group Inc., O'Charley's Inc., Red Robin Gourmet Burgers Inc., Papa John's International Inc., Denny's Corp., McCormick & Schmick's Seafood Restaurants Inc., Morton's Inc. and Texas Roadhouse Inc.

A breakdown of third-quarter sales by segment:

Casual dining

Positive sales trends were reported by Texas Roadhouse and DineEquity, whose Applebee's chain posted its first positive same-store sales result in more than two years with a 3.3-percent increase. The improvement at Applebee's led the company, which also owns the IHOP chain, to raise its outlook for the year.

Texas Roadhouse cited increased customer traffic as it reported that third-quarter same-store sales rose 4.3 percent at corporate restaurants and 4.4 percent at franchised branches.

Red Robin Gourmet Burgers Inc. said same-store sale rose 0.9 percent at corporate restaurants and 3.5 percent at franchised branches, compared with double-digit decreases in the year-ago quarter. However, the company said it expected fourth-quarter sales to fall as national advertising trails off.

O'Charley's flagship brand continues to struggle to get its same-store sales in positive territory, posting a 2.2-percent decline. The company highlighted an uptick in traffic at the brand, as well as positive sales trends at Ninety Nine Restaurants and Stoney River Legendary Steaks brand. Same-stores sales at those concepts rose 1.2 percent and 1.7 percent, respectively.

Family-dining chain Denny's saw same-store sales in the third quarter decrease 0.7 percent at corporate locations and 1.2 percent at franchised restaurants. However, the company highlighted a 2.3-percent rise in guest counts, which it said was the strongest performance in that metric since 2005.

Quick service

Starbucks executives said the company was “firing on all cylinders” after reporting third-quarter results that included an 8-percent jump in same-store sales at domestic branches, reflecting a 5-percent increase in traffic and a 2-percent uptick in check average.
Papa John's reported a 1.6-percent decline in same-store sales at domestic corporate stores and 0.3-percent dip at franchised branches. The pizza company said the results reflected increased traffic but smaller average checks, as discounting pressure in the pizza segment remains high.

Einstein Noah Restaurant Group, the parent of several bagel-focused bakery-café chains, said systemwide same-store sales and transactions rose for the first time this year in the third quarter. Same-store sales grew 3.5 percent at franchised and licensed locations in the third quarter, which offset a 0.2-percent decrease in same-store sales at corporate locations.


Morton's cited improved business travel and convention business as it reported a 3.2-percent increase in same-store sales at its steakhouse concept.

McCormick & Schmick's Seafood Restaurants, meanwhile, said same-store sales declined 4.6 percent for the third quarter, which it blamed on the difficult economy and the impact of the Gulf oil spill on seafood consumption.

Contact Molly Gise at [email protected].

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