Frisch’s Restaurants Inc. swung to a net loss in its first quarter of fiscal 2012, due mostly to a $4 million pretax impairment charge and costs associated with the closure of six Golden Corral units.
Cincinnati-based Frisch’s operates or franchises Frisch’s Big Boy restaurants and is Golden Corral franchisee.
For the quarter ended Sept. 20, Frisch’s recorded a net loss of $2.3 million, or negative 46 cents per share, compared with a $2.7 million net profit, or 54 cents per share, a year earlier.
Revenue declined 1.3 percent to $91.7 million, compared with $93 million a year earlier.
At Frisch’s Big Boy, same-store sales were flat for the quarter, although total sales rose 2 percent due to a new unit opening during the quarter.
Same-store sales fell 4.9 percent at Frisch’s 29 franchised Golden Corral locations. Total Golden Corral sales fell 7.8 percent, reflecting the closure of six Ohio locations on Aug. 23.
“Our first quarter was very tough from both a revenue and cost perspective,” said Craig Maier, Frisch’s president and chief executive. “The family-dining segment of the restaurant industry continues to suffer from both declining customer counts as the U.S. economic recovery languishes, along with inflation impacting our food costs.”
Frisch’s said last week it is seeking strategic alternatives for Golden Corral. It has retained investment bank Brookwood Associates LLC to conduct a review of the chain’s business.
“We did take decisive action in the quarter to improve the profitability of our Golden Corral business segment by shuttering six underperforming stores, which were unprofitable in fiscal 2011,” Maier said. “In the weeks following these closures, we are seeing improved revenues at nearby Golden Corral and Big Boy stores as customers migrate from the shuttered stores.”
Frisch’s operates 96 Frisch’s Big Boy restaurants in Ohio, Kentucky and Indiana, and franchises an additional 25 units of the chain in those states. Golden Corral restaurants are located in the metropolitan areas of Cincinnati, Cleveland and Pittsburgh; Columbus, Dayton and Toledo, Ohio; and Louisville, Ky.