O'Charley's 1Q Profit Drops As Sales Decline

NASHVILLE, Tenn. (AP) — Casual dining chain O'Charley's Inc. said Tuesday its fiscal first-quarter profit fell 31 percent as restaurant sales dropped on a continued consumer spending pullback.

Casual dining operators have been squeezed during the recession as people worried about the economy and potential unemployment opt to dine in more. Those that are going out to eat are often spending less than they did in the past, which is also hurting restaurants.

For the period ended April 19, earnings available to common stockholders dropped to $6.9 million, or 34 cents per share. That compares with $10 million, or 46 cents per share, a year earlier.

Analysts polled by Thomson Reuters, whose estimates normally exclude one-time items, predicted a loss of a penny per share.

Revenue dropped to $291.7 million, down 2 percent from $297.5 million last year on declining restaurant sales. But the results still managed to beat Wall Street's estimate of $282.8 million.

Sales at stores open at least a year, commonly known as same-store sales, dipped 2.9 percent at company-run restaurants. Ninety Nine Restaurants same-store sales fell 4.5 percent, while Stoney River Legendary Steaks same-store sales slipped 17.2 percent.

Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

O'Charley's runs or franchises 372 restaurants under the O'Charley's, Ninety Nine Restaurant and Stoney River Legendary Steaks brands.