Moreover, weekly average same store sales rose 5.1%--on the high side of the chain's expectations, according to Lonnie J. Stout II, J. Alexander's Corporation chairman, president and CEO. He added that the chain's average guest check, including alcoholic beverage sales, increased by approximately 6% for the quarter, while average guest counts declined by approximately 1%.
During the quarter, J. Alexander's operating margins increased to 13% of net sales compared to 12.4% in the first quarter of 2005, driven primarily to lower costs as a percentage of sales.
Despite the strong performance, Stout issued a caution about the chain's future performance. "While we are quite satisfied with these results, we do want to note that they are compared to a prior year quarter in which cost of sales and other operating costs were relatively high, and we believe our second quarter comparisons will be much more difficult," he said in a statement.
Stout added that operating expenses continue to be under pressure in 2006 from increases in utility costs, and that training and other general and administrative expenses are expected to be higher in the second quarter of 2006. As a result, the chain expects its second quarter earnings to fall below earnings for the same period last year, although earnings for the first half of 2006 are expected to be above those for the first half of 2005.
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