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October 18, 2004
Chain Update: McDonald’s, The Cheesecake Factory And Others
A number of leading chain restaurants have announced significant financial or operational news in recent days.
* McDonald's Corp. posted a 42% rise in quarterly net income on the strength of its recent U.S. turnaround, Reuters has reported. Net earnings for the third quarter rose to $778.4 million or 61 cents per share -- in line with a higher-than-expected forecast the company gave last week. In the same period last year, McDonald's earned $547.4 million or 43 cents per share. Revenue climbed 9% to $4.9 billion, while sales at McDonald's restaurants open at least 13 months rose by 5.8%.
* The Cheesecake Factory Inc. reported record revenue for its fiscal third quarter that ended on Sept. 28. The company said revenue increased by 25% to $247.7 million and comparable restaurant sales increased by 2.6% compared to the same quarter of the prior year. Net income for the quarter was $12.8 million or 24 cents per diluted share, including a $4.5 million or six-cent per share reserve established for pending lawsuits, compared to net income of $14.4 million or 28 cents per diluted share for the same quarter last year. Before the effect of this reserve, net income per diluted share would have been 30 cents per share.
* Domino's Pizza Inc. said it reduced its loss for its latest quarter, as revenue increased by 11%. The Ann Arbor, Mich., company reported profit for the three months that ended Sept. 5 of $979,000 vs. a loss of $18 million a year earlier, according to the Associated Press. The loss per share came to two cents in the latest quarter, compared with a loss of $1.85 a year ago. Domino's also declared its first quarterly dividend of six and one-half cents a share, payable on Dec. 15 to shareholders of record on Dec. 1. Its pro forma net was $16.1 million or 23 cents per share in the third quarter, reflecting the company's July 13 initial public offering and including the repayment of $109.1 million of senior subordinated debt.
* Denny's and The King Center, the official memorial to the life, work and philosophy of Dr. Martin Luther King Jr., have formed a partnership to create the "Realizing the Dream: Nonviolence or Nonexistence" program. The purpose of the program is to engage youth through a wide array of interactive learning modules, including computer-based activities and volunteerism, which encourage young people to practice nonviolence and pursue a life of service to others. The program is based on Dr. King's six core principles of nonviolence and six steps to nonviolent social change, such as information gathering and education, as well as winning friendships and nonviolence as a way of life.
* Applebee's International Inc. has named Rohan St. George president of its international division, which operates 53 restaurants in 10 countries outside the United States. Previously, St. George served as managing director of Yum! Restaurants International in Puerto Rico, the U.S. Virgin Islands and Venezuela. Before that, he was vice president of Yum! Brands Inc.'s global operations for KFC, Pizza Hut and Taco Bell. Applebee's has restaurants under construction in Ecuador and Brazil, both of which are expected to open before the end of the year. There are now more than 1,600 Applebee's restaurants operating worldwide.
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