Miami-based Benihana Inc. (BNHN) posted restaurant sales of $23.0 million for the four-week period ending November 7, 2010, up 3.7% from $22.2 million in the year-ago period. This is the first four-week period of third quarter 2011.
Results reflect the benefits of the Benihana Teppanyaki Renewal Program, which the company initiated in 2009 to improve the dining experience of the guests at the Benihana Teppanyaki restaurants.
The company’s comparable restaurant sales grew 4.8% in the reported period, representing the ninth consecutive period of growth. The comparable restaurant sales jumped 8.2% year over year at Benihana Teppanyaki restaurants, given the traffic gain of 11.8%. However, due to challenging economic environment, same store-sales declined 1.3% at RA Sushi restaurant and dipped slightly by 0.2% at Haru.
The largest U.S. chain of Japanese restaurants generated 99.5% of its revenues from restaurant sales (65% from Benihana Teppanyaki, 25% RA Sushi and 10% Haru) and 0.5% from franchisee fees and royalty.
The Zacks Consensus Sales Estimate for the third quarter of 2011 is $71 million. We expect the company to exceed the estimate as holiday season is ahead. Additionally, the company is undertaking promotional and marketing initiatives to attract the customers.
We have a Zacks #3 Rank (short-term Hold recommendation) on the shares. We also reiterate our long-term Neutral rating.
Its prime competitors are Panera Bread Co. (PNRA) and McCormick & Schmick’s Seafood Restaurants Inc.(MSSR) and P.F. Chang’s China Bistro Inc. (PFCB).
Benihana operates 97 restaurants, including 63 Benihana teppanyaki restaurants, 25 RA Sushi Bar restaurants and 9 Haru sushi restaurants. Additionally, the company has 20 franchised Benihana teppanyaki restaurants, which are operating in the U.S., Latin America and the Caribbean.
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