McCormick & Schmick's Seafood Restaurants, Inc. Third Quarter 2008 Financial Results

McCormick & Schmick's Seafood Restaurants, Inc. (Nasdaq: MSSR) reported financial results for its fiscal third quarter ended September 27, 2008.

Financial results for the third quarter 2008 compared to the third quarter 2007:

• Revenues increased 13.4% to $99.9 million from $88.1 million

• Comparable restaurant sales decreased 5.5%

• Operating income decreased to $1.9 million from $2.4 million

• Net income decreased to $1.4 million from $2.0 million

• Diluted earnings per share decreased to $0.09 from $0.14

Revenues for the third quarter of 2008 increased 13.4% to $99.9 million from $88.1 million in the third quarter of 2007. The growth in revenues is primarily attributable to revenues generated by the opening of new restaurants in the last twelve months. Comparable sales decreased 5.5%, which reflects a decrease in guest traffic of 9.8%. The Company added four restaurants during the third quarter of 2008 in Raleigh, North Carolina, Atlantic City, New Jersey, Edina, Minnesota, and Rosemont, Illinois. The Company has since added two restaurants in the fourth quarter of 2008 in Scottsdale, Arizona and Houston, Texas.

Douglas Schmick, Chairman and Chief Executive Officer, said, 'Our third quarter results reflect the volatility of the current consumer environment, as well as our best efforts to manage operations in the face of ongoing challenges to our business. Given the recent credit market crisis, we have focused on maintaining maximum financial flexibility and ensuring that our balance sheet remains financially sound, including managing our debt level and limiting our new unit development for next year. We are reaching out to the most loyal segments of our customer base with targeted marketing and product features, and are confident that we have the right initiatives in place, in terms of both sales building and cost containment, to strengthen our relative position in the marketplace.'

Financial Guidance

The Company intends to open a total of 11 new restaurants in fiscal year 2008, of which 10 have already opened. The Company intends to open five to six new restaurants in fiscal year 2009.

This has been an unusually difficult business environment to predict traffic and resulting revenues. For the month of October, comparable sales declined approximately 10%. Based on such performance, if comparable sales trends do not change meaningfully for the balance of the fourth quarter, the Company believes fourth quarter revenues would be approximately $104 to $106 million and diluted earnings per share would be approximately $0.15 to $0.20. For every one percentage point change in the quarterly comparable sales, the estimated impact to earnings per share is approximately $0.02 to $0.03.


Logos, product and company names mentioned are the property of their respective owners.

Reader Comments:

Be the first to leave a comment for this article

Tweet