Steak propels McCormick & Schmick's to 17% sales jump

Nation's Restaurant News,  August 20, 2007  by Lisa Jennings

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PORTLAND, ORE. -- An expanded steak program, which helped to boost second-quarter sales nearly 17 percent at McCormick & Schmick's Seafood Restaurants Inc., will continue to play an important role on the menus of the seafood-centric brand, officials said earlier this month.

Though the 68-unit, upscale-dinnerhouse chain will not lose its seafood focus or its daily menus boasting fresh fish, the steak offerings helped it maintain higher check averages during the second quarter and are expected to do so in the future, said Doug Schmick, the company's chairman and chief executive.

About 16 steak dishes now are featured more prominently on the menu and include smaller cuts, such as medallions, as well as beef and shellfish combinations that appeal to both male and female diners, Schmick said.

"Steak now accounts for about 9 percent of sales," he said, "but I can see that over time growing to about 15 percent."

Higher-priced seafood promotions, like king salmon dishes, also boosted check averages during the latest quarter, the company reported, as did the introduction in May of a classic-cocktail program featuring pre-Prohibition-era drinks and more wines by the glass at 5- or 8-ounce pours. McCormick & Schmick's, like many upscale brands including Ruth's Chris Steak House and Morton's, has been focusing on the higher-margin bar business.

For the quarter ended June 30, Portland-based McCormick & Schmick's reported a 27.6-percent increase in net income to $4.5 million, or 31 cents per share, from $3.5 million, or 24 cents per share, a year earlier. Revenue increased 16.8 percent to $89.6 million.

Same-store sales increased 2.3 percent, and the company logged for the first time revenues from the March acquisition of five Boathouse restaurants. The company plans to open a sixth Boathouse in the fourth quarter and one or two annually thereafter, officials said.

McCormick & Schmick's operates 68 of its namesake restaurants in the United States.

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