Ahead Of The Bell: Benihana Pressured By 2 Brands

NEW YORK (AP) — Benihana Inc.'s results are likely to be pressured near term by its Haru and Benihana Teppanyaki brands, an analyst said Tuesday.

Late Monday, the restaurant chain said its first-quarter profit slid 50 percent as it struggled to draw customers during the recession.

Brad Ludington of KeyBanc Capital Markets said he was pleased with improved same-store sales results for RA Sushi, but expects Haru and Benihana Teppanyaki to be a near-term drag.

"While we are optimistic about the long-term potential of management's Teppanyaki renewal program, we expect the impact of costs related to the rollout of the initiative to be exaggerated by continued significant same-store sales declines at both the teppan brand and Haru in the coming months," he wrote in a client note.

The Miami-based company said Monday that its sales at locations open at least a year, a key indicator of a retailer's or restaurant company's financial health known as same-store sales, fell 13.1 percent at Benihana Teppanyaki restaurants — the bulk of its business. Same-store sales dropped 14.8 at Haru restaurants and grew 3.5 percent at its RA Sushi chain.

Ludington reduced Benihana's 2010 profit forecast to 38 cents per share from 46 cents per share and reaffirmed a "Hold" rating.

Analysts surveyed by Thomson Reuters, whose estimates generally exclude one-time items, predict 2010 earnings of 46 cents per share.