P.F. Chang's Reports Updated Fourth Quarter Earnings Guidance
P.F. Chang's China Bistro, Inc. (NASDAQ: PFCB) reported updated estimates of consolidated earnings per share for the fourth quarter ended December 30, 2007 of $0.32 to $0.34 based on preliminary unaudited results.
P.F. Chang's China Bistro, Inc. (NASDAQ: PFCB) today reported updated estimates of consolidated earnings per share for the fourth quarter ended December 30, 2007 of $0.32 to $0.34 based on preliminary unaudited results, excluding an estimated charge of $0.08 related to the Company's Taneko Japanese Tavern as discussed below ($0.24 to $0.26 per share including such charge). These revised estimates are $0.09 to $0.11 above previously reported fourth quarter earnings guidance of $0.23 per share.
As previously announced, the Company exceeded its revenue forecast for the fourth quarter by approximately $7 million, with the majority of the increase resulting from better than anticipated December activity. This incremental revenue enabled the Company to achieve improved leverage of its fixed operating expenses and reverse some of the cost pressure trends that were experienced during the first two periods of the quarter, accounting for roughly half of the favorable variance. In addition, the Company experienced favorable group medical and workers' compensation adjustments resulting from better than expected claims development. Because the majority of these adjustments relate to prior periods' claims, the Company does not expect to see similar adjustments going forward.
A higher annual effective tax rate resulting from greater than expected full-year pre-tax income is also reflected in these updated estimates.
As referenced above, the Company expects to record an approximate $0.08 per share charge related to the assets of its Taneko Japanese Tavern restaurant during the fourth quarter ended December 30, 2007. After accounting for the anticipated charge related to Taneko, consolidated earnings per share for the fourth fiscal quarter is expected to total approximately $0.24 to $0.26 per share. As announced yesterday, the Company has a memorandum of understanding with longtime Dallas restaurateur Jack Baum, for a sale of its sole Taneko Japanese Tavern restaurant. Under the proposed deal, Taneko's current management team will partner with Jack Baum's restaurant management company, Food, Friends & Co., on the development and growth of the Taneko business, and the Company will retain a minority interest in the business. Food, Friends & Co. currently operates 13 restaurants in 9 states, including Wapango, Mexico Cantina y Veracruz Cooking, Cozymel's Mexican Grill and Woodlands.
The Company also today announced that it will be presenting at the Cowen & Company's 6th Annual Consumer Conference on Tuesday, January 15, 2008 at the Westin Times Square Hotel in New York, NY.
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