P.F. Chang's Q4 net income up 22% to US$14.7M, but consolidated revenues down 4.7% to US$311.2M, partly due to one less operating week in the period; comparable-store sales up 0.1% at the Bistro and 1.3% at Pei Wei
February 16, 2011
– P.F. Chang’s China Bistro, Inc. (NASDAQ:PFCB - News) today reported financial results for the fourth quarter and fiscal year ended January 2, 2011.
Highlights for the fourth quarter of 2010 compared to the prior year quarter include:
- Consolidated revenues declined 4.7% to $311.2 million including the impact of one less operating week during the fourth quarter of fiscal 2010.
- Comparable store sales increased 0.1% at the Bistro and 1.3% at Pei Wei.
- Net income increased 22.0% to $14.7 million.
- Net income per diluted share increased 23.1% to $0.64.
Highlights for fiscal 2010 compared to prior year include:
- Consolidated revenues increased 1.2% to $1,242.8 million including the impact of one less operating week during fiscal 2010 compared to fiscal 2009.
- Comparable store sales declined 0.1% at the Bistro and increased 1.8% at Pei Wei.
- Net income increased 7.9% to $46.6 million.
- Net income per diluted share increased 9.2% to $2.02.
The Bistro achieved positive same store sales in the fourth quarter of 2010. Average ticket at the Bistro was positive during the quarter due to the benefit of a menu price increase combined with improvements in high dollar transactions. Traffic declined during the fourth quarter partially due to the impact of severe winter weather in late December.
Pei Wei achieved positive same store sales in the fourth quarter of 2010. Average ticket at Pei Wei was positive for the entire quarter including the collective impact of incremental sales of small plate menu items, greater online ordering usage and the benefit of a menu price increase.
Comparable store sales for the fourth quarter of fiscal 2010 reflect results from the 13 week operating period in the current year compared to the same 13 week operating period in the prior year. Comparable store sales for December 2010 reflect results from the 4 week operating period in the current year compared to the same 4 week operating period in the prior year.
Global Brand Development
Global Brand Development revenues totaled $0.9 million for the fourth quarter of 2010 related to fees from seven international Bistro restaurants and a retail line of premium frozen food entrées, all of which operate under licensing agreements, as well as two Bistro restaurants operated in Hawaii under a joint venture arrangement.
The Company’s Board of Directors authorized a cash dividend payment of $0.29 per share on the Company’s outstanding common stock. The dividend is payable on March 14, 2011 to shareholders of record at the close of business on February 28, 2011. The amount of the cash dividend was computed based on 45% of the Company’s net income for the quarter ended January 2, 2011.
The Company anticipates that fiscal 2011 consolidated revenues will increase approximately three to four percent compared to fiscal 2010 due to expectations of positive same store sales at both concepts combined with revenues from nine to thirteen anticipated new restaurant openings during fiscal 2011 and the benefit of a full year of revenues for restaurants that opened during fiscal 2010.
The Company expects to experience higher commodity costs and increased labor wage rates during fiscal 2011 which will be partially offset with a slight menu price increase at both concepts. Despite these cost pressures, the Company anticipates that fiscal 2011 restaurant operating margins will increase compared to fiscal 2010, primarily due to lapping the impact of the first quarter 2010 Bistro Happy Hour rollout combined with a higher contribution from Global Brand Development businesses. In addition, the Company expects an increase in general and administrative expenses in fiscal 2011, primarily related to higher share-based compensation expense.
The Company expects to open three to five new Bistro restaurants and six to eight new Pei Wei restaurants during fiscal 2011. In addition, the Company expects its international partners collectively to open seven to ten Bistro restaurants in international markets during fiscal 2011.
The Company plans to repurchase approximately $60 million in common shares under its current authorization during fiscal 2011.
Overall, the Company expects consolidated diluted earnings per share to range from $2.15 to $2.20 for fiscal 2011, an increase of approximately 10%.
The following definitions apply to these terms as used throughout this release:
- Income from continuing operations refers to income from continuing operations, net of tax, attributable to PFCB common stockholders.
- Net income refers to net income attributable to PFCB common stockholders.
- Comparable store sales changes include company-operated restaurants and represent the change in period-over-period sales for the comparable restaurant base. A restaurant becomes comparable in its eighteenth month of operation.
Financial reporting dates in fiscal 2011
The Company plans to announce quarterly financial results and hold conference calls to discuss its results for the first three quarters of fiscal 2011 as outlined below. The earnings press releases will be issued at approximately 7:00 am ET and the conference calls will follow at 1:00 pm ET on the same day. Dates and times could be subject to change.
Conference call information
The Company is hosting a conference call today at 12:00 pm ET in which management will provide further details on the fourth quarter results. A webcast of the call can be accessed through the company’s website at http://www.pfcb.com.
About the Company
P.F. Chang’s China Bistro, Inc. owns and operates two restaurant concepts in the Asian niche. P.F. Chang’s China Bistro features a blend of high-quality, Chinese-inspired cuisine and American hospitality in a sophisticated, contemporary bistro setting. Pei Wei Asian Diner offers a modest menu of freshly prepared pan-Asian cuisine in a relaxed, warm environment offering attentive counter service and take-out flexibility. In addition, the Company has extended the P.F. Chang’s brand to international markets and retail products both of which are operated under licensing agreements.
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