O'Charley's posts loss in 3rd Q, reduces annual expectations

Nation's Restaurant News,  Nov 12, 2007  

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NASHVILLE, TENN. -- O'Charley's Inc., operator or franchisor of 363 restaurants under three chains, swung to a third-quarter net loss from a year-ago profit as impairment and other charges ate into a revenue uptick of 0.9 percent to $220 million. The company also revised downward by between 24 cents and 26 cents its annual per-share earnings outlook. It was the company's second downward revision, which it has blamed on weak same-store sales and the competitive, beleaguered casual-dining environment.

The company reported a net loss of $400,000, or 2 cents per share, for the quarter ended Oct. 7, versus a year-earlier profit of $2.1 million, or 9 cents per share.

O'Charley's operations include 239 namesake units, 114 Ninety Nine Restaurants and 10 Stoney River Legendary Steaks. Excluding charges that totaled 22 cents per share from impairment, closures, supply chain changes and a divesture of its commissary, O'Charley's net earnings totaled $3.8 million, or 16 cents per share, versus year-ago profit of $2.1 million, or 9 cents per share.

Latest-quarter same-store sales fell 1.7 percent at O'Charley's corporate units and 0.8 percent at Stoney River, but increased 1.5 percent at the Ninety Nine restaurants.

O'Charleys's now expects to report net earnings per share of between 42 cents and 47 cents for the fiscal year ending Dec. 30. Fiscal 2006 per-share earnings totaled 80 cents.

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