SCOTTSDALE Ariz. The board of directors at P.F. Chang’s China Bistro Inc. has authorized a share repurchase program that will allow the company to buy up to $100 million in its common stock through Dec. 15, 2011.
The company said it would use cash on hand for the repurchase program, but that it would also need to amend its credit agreement, which had restricted future share repurchases. The details of P.F. Chang’s credit amendments were not outlined as of press time.
On Thursday, J.P. Morgan securities analyst John Ivankoe said the performance of P.F. Chang’s namesake brand was running close to expectations for the fourth quarter, which means still negative sales trends but improving costs. At the company’s Pei Wei Asian Bistro brand, same-store sales should run positive, with an increase of 2 percent, according to Ivankoe. The chain also is expected to open seven units this year and five more next year. Development will be focused on one new market, Chicago, as well as on the filling in of other large, underpenetrated markets including South Florida, Philadelphia, and Washington, D.C., Ivankoe said.
Ivankoe added that P.F. Chang’s frozen food agreement with Unilever, which would include at least eight products priced between $7 and $9 and be available for grocers in June, could lead to total retail sales of $160 million. Assuming a 3-percent royalty rate on those sales, P.F. Chang’s would garner revenue, and with a high margin, of about $4.8 million, Ivankoe calculated.
Contact Sarah E. Lockyer at [email protected].
