Chicago-based Morton’s Restaurant Group, Inc. (MRT) recently posted fourth quarter 2010 adjusted earnings of 31 cents, in line with the Zacks Consensus Estimate, but up 24.0% year over year. The earnings results were driven by improvement in business travel and convention attendance.
During the quarter, GAAP net income from continuing operation was $5.3 million or 30 cents per share compared with a loss of $66.9 million or $4.21.
Morton’s engaged in the ownership and operation of restaurants said that total revenue in the quarter climbed 6.2% from the prior-year quarter to $84.1 million. The upside in revenues was attributable to comparable sales growth of 5.3% at Morton’s steakhouse restaurants.
The company’s full-year adjusted earnings per share were 30 cents versus 10 cents in full fiscal 2009. Revenues were $296.1 million in full fiscal 2010, representing a year-over-year leap of 5.3%, as comparable- restaurant sales at steakhouse jumped 4.8%.
During the quarter, adjusted operating margin dipped 40 basis points (bp) to 8.9%, aided by a 40 bp spike in food and beverage cost, 70 bp rise in pre-opening cost, 30 bp increase in depreciation and amortization expense, 60 bp hike in general and administrative expense, partially offset by a 120 bp fall in restaurant operating expense and a 40 bp drop in marketing and promotional expense.
During the quarter, the company opened its first steakhouse in Shanghai, China and has also recently opened a brand new steakhouse in the uptown area of Dallas, Texas.
Outlook
For the first quarter of 2011, management expects revenue in the range of $81 million to $83 million, same restaurant revenue to inch up 6% to 8% and earnings per share to be in the range of 13 cents to 15 cents.
For fiscal 2011, the company anticipates revenue to be between $318 million to $323 million, comparable restaurant revenue to rise 6% to 8% and earnings per share to be approximately 44 cents to 49 cents.
Our Take
As the economy is showing signs of improvement, we believe Morton’s will be able to generate improved earnings. We expect estimates to go up in the coming days based on fourth quarter results and outlook. The Zacks Consensus Estimate for 2011 is pegged at 45 cents and 53 for 2012.
One of Morton’s primary competitors, Red Robin Gourmet Burgers, Inc (RRGB) posted fourth quarter 2010 adjusted earnings of 12 cents per share, which surpassed the Zacks Consensus Estimate of 5 cents. Results benefited from the upside in revenue driven by comparable sales growth.
MORTONS RESTRNT (MRT): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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