Benihana Sales Up - Analyst Blog
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Benihana Inc. (BNHN), the largest U.S. chain of Japanese restaurants, posted restaurant sales of $22.7 million for the four-week period ending December 5, 2010, up 3.7% from $21.9 million in the year-ago period. Results reflect the benefits of the Benihana Teppanyaki Renewal Program, which the company initiated in 2009 to improve the dining experience of the guests at the Benihana Teppanyaki restaurants. The sales were also driven by Chef's Special promotion initiative during the period.
The company's comparable restaurant sales grew 4.5% for the period, representing the tenth consecutive period of growth. In the first four-week period of the third quarter of 2011, restaurant sales spiked up 3.7% and same store sales upped 4.8%.
The comparable restaurant sales jumped 8.9% at Benihana Teppanyaki restaurants, given the rise in guest count of 12.6%. However, due to challenging economic environment, same store-sales declined 3.7% at RA Sushi restaurant and dipped 1.8% at Haru in the second four-week period of third quarter 2010. During the first four-week period ending November 7, Benihana Teppanyaki restaurants same store sales escalated 8.2% over year, and plunged 1.3% at RA Sushi restaurant and 0.2% at Haru.
Though business conditions are improving, Benihana continues to face challenges at its RA Sushi restaurant and Haru. The second four-week period comparable sales performance at these restaurants was more disappointing than the first four-week period. The company plans to improvise sales at these restaurants by focusing on various food items on the menu, promotional and marketing initiatives.
Store operating weeks during the period were 1.5% lower than the year-ago period.
The Miami-based company generates 99.5% of its revenues from restaurant sales (66% from Benihana Teppanyaki, 24% RA Sushi and 10% Haru) and 0.5% from franchisee fees and royalty.
The Zacks Consensus Estimate for sales during the third quarter of 2011 is $71 million. We expect the company to exceed the estimate, given that holiday season is ahead. Additionally, the company is undertaking promotional and marketing initiatives to attract the customers.
The company has a Zacks #3 Rank (short-term Hold recommendation) on the shares. We also reiterate our long-term Neutral rating.
Benihana operates 97 restaurants, including 63 Benihana teppanyaki restaurants, 25 RA Sushi Bar restaurants and 9 Haru sushi restaurants. Additionally, the company has 20 franchised Benihana teppanyaki restaurants, which are operating in the U.S., Latin America and the Caribbean. Its prime competitors are Chipotle Mexican Grill Inc. (CMG), McCormick & Schmick's Seafood Restaurants Inc. (MSSR) and P.F. Chang's China Bistro Inc. (PFCB).
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