MSSR Mccormick & Schmicks Seafood Restaurants, Inc. (MM)

Miami-based Benihana Inc (BNHN) posted restaurant sales of $25.4 million for the four-week period ending July 17 2011, up 6.3% from $23.9 million delivered in the year-ago period. 

The upside in sales was primarily driven by improved comparable restaurant sales across all three restaurant concepts. For the four-week periods ending April 24, May 22 and June 19 restaurant sales jumped 5.8%, 4.5% and 6.0%, respectively. 

The company’s comparable restaurant sales grew 6.7% in the fourth four-week period of the first quarter of 2012, representing the eighteenth consecutive period of growth. In the first, second and third four-week periods of the first quarter of 2012, same-store sales spiked 5.8%, 4.8% and 6.7% respectively.

The comparable restaurant sales jumped 8.1% at Benihana Teppanyaki restaurants on the back of higher guest count (up 5.6%) resulting from the Benihana Teppanyaki Renewal Program. During the first, second and third four-week periods of the first quarter of 2012, Benihana Teppanyaki restaurants comps escalated 9.0%, 7.9% and 9.3%, respectively. Moreover, same-store sales for the period leaped 5.5% at RA Sushi restaurant compared with an upside of 2.5% during the third four-week period.

Additionally, comps at Haru finally inched up 0.5% for the period, following a plunge of 5.3% in the first four-week period ending April 24,  2.3% in the second four week period ending May 22 and 0.3% in the third four week period ending June 19.

Store operating weeks during the period were 1.0% lower than the year-ago period.

The leading operator of Japanese restaurants in the U.S generates 99.5% of its revenues from restaurant sales (66% from Benihana Teppanyaki, 25% from RA Sushi and 9% from Haru) and the remaining 0.5% from franchise fees and royalties.

The company reported positive sales in all the four-week periods of the first quarter of 2012 and hence we expect company to post strong sales for the quarter. The company is also undertaking promotional and marketing initiatives to attract more customers.

We reiterate our long-term Underperform recommendation on the stock. Its prime competitors are McCormick & Schmick's Seafood Restaurants Inc. (MSSR) and P.F. Chang's China Bistro Inc. (PFCB).

 
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