Greenberg: Picking at Country Style Cooking's Guidance
By: Herb Greenberg | 01/13/14 - 04:06 PM EST
SAN DIEGO (TheStreet
) -- Truth stranger than fiction department: Shares of Country Style Cooking (CCSC)
, operators of a chain of popular restaurants in China, are sizzling after the company issued a press release today saying it "anticipates" fourth quarter revenue will "slightly" beat guidance.
However, by slightly beating guidance it will just meet full-year guidance. Here's the math: Prior Q4 guidance was $53.2 million to $54.8 million. Revenue for the first nine months were $166.383 million. Full-year guidance calls for $220.4 million to $221.1 million.
To get to that range, Q4 would have to be $54 million to $55.07, the mid-point of which is (drumroll!) $54.8 million -- the prior guidance that is being beaten.
In other words, Country Style Cooking's stock is up because the company, in effect, said it will merely meet expected annual guidance.
As one friend says: "Suppose I say I will run two miles in 15 minutes. I run the first mile in eight minutes and announce that I will run the second mile in 7:30. But, I also maintain I will still run the two miles in 15 minutes. Obviously I have to run the second mile in seven minutes. How is it a 'beat' if I run the second mile in 7 minutes? I implied that I would and indeed had to to make the 15-minute mark.
"And, what's with the qualifier 'anticipate'? The quarter is two weeks over. How come they don't know?"
Because the whole thing is nuts, that's why.
--Written by Herb Greenberg in San Diego