Most analysts were expecting earnings of 36 cents pershare, although the chain's numbers outperformed thehighest analyst forecast of 41 cents.
"This was clearly a strong quarter for us," saidBenihana president and CEO Joel Schwartz during thechain's earnings conference call. He attributed thesubstantial profit to a 2.5% to 3% price increase,increased customer traffic and lower beef and shrimpprices. Total guest count at the teppanyakirestaurants increased by 6.4% to 2.4 millioncustomers, Haru's total guest count increased by 15.7%to 183,000, and RA Sushi's total guest count increasedby 41% to 350,000.
Benihana's total revenues increased by 13% during thefirst quarter fiscal 2006 to $74.1 million, comparedwith $65.4 million for the same period a year ago. "Ofthe total rise in sales of $8.8 million, almosttwo-thirds can be attributed to increases incomp-store sales," Schwartz said.
The teppanyaki restaurants experienced an 8.5%increase in comparable sales, while RA Sushicomparable sales increased 25% and Haru's comp-storesales rose 0.5%. "Especially notable was RA Sushi'scomp-store sales," Schwartz pointed out, adding thatfive RA Sushi restaurants are under development. "Weare accelerating our development of RA Sushi," hesaid. The five new restaurants will be located in PalmBeach Gardens, FL; Huntington Beach, CA; Glenview, IL;Houston; and Tustin, CA.
Currently, Benihana operates 72 restaurants nationwide including 56 Benihana teppanyaki restaurants, seven Haru sushi restaurants, eight RA Sushi Bar Restaurants and one Doraku restaurant.
Looking forward, the chain said it expects comp-storesales to increase 4% to 5% for the second quarterfiscal 2006. Net income is forecasted at 20 cents to22 cents per share slightly lower than analysts'expectations of 24 cents. The company said earningswill be diluted by the issuance of the convertiblepreferred stock and the expectation that currentstockholders will sell off shares.
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