August 15, 2005

Chain Update

Brinker and Red Robin are among the chain restaurants that announced significant financial and operational news.

• Brinker International revealed in an SEC filing that it signed a letter of intent to sell its Corner Bakery Café concept. Neither the buyer nor the purchase price was disclosed.
• Steak n Shake reported its financial results for its fiscal third quarter, which ended July 6. The chain’s total revenue grew by 13.2% vs. the year-ago period to $147.9 million. Net earnings were up 5% to $7.8 million. Same-store sales for company-owned units increased by 2.8%. The chain also reaffirmed its guidance of diluted earnings per share for the fiscal year of between $1.08 and $1.11.
• Bob Evans farms announced that total net sales for its fiscal first quarter, which ended July 29, grew by 23%. The increase, the company said, is attributable primarily to its acquisition of Mimi’s Café in July 2004. Despite the sales increase, the company’s net income fell to $7.2 million vs. $14.2 million from last year’s fiscal Q1. The company said the decline was due to lower same-store sales and operating margins at Bob Evans Restaurants. Same-store sales at Bob Evans units fell by 1.9% during the quarter, while same-store sales at Mimi’s Café grew by 3%.
• Red Robin Gourmet Burgers announced that Michael Snyder retired as the company’s chairman and CEO following the release of information from a special investigation into the use of chartered aircraft and travel and entertainment expenses. The investigators found that various expenses by Snyder were not consistent with company policy. In both capacities, he was replaced by Dennis Mullen, a 30-year restaurant and hospitality industry veteran and a member of Red Robin’s board of directors.

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