Earnings Preview: P.F. Chang's China Bistro

P.F. Chang's China Bistro (PFCB) is expected to report Q3 earnings before market open Wednesday, October 22, with a conference call scheduled for 1:00 pm ET.

Guidance

Analysts are looking for a profit of 25c on revenue of $303.25M. The consensus range is 22c to 33c for EPS, and revenue of $299.2M to $311.25M, according to First Call. In July, P.F. Chang's raised its FY08 EPS forecast to $1.36 to $1.42 from $1.34 to $1.40 vs. First Call consensus of $1.39; the company forecast FY08 revenue growth of 12% to 13%.

Analyst Views

In a September 12 research note, Oppenheimer analyst Matthew Di Frisco lowered his rating on the restaurant chain to Underperform from Perform, attributing the downgrade to the store's particular vulnerability to lower sales in the current economic situation of consumer cut-backs. He also expects the company to underperform in its Q4 same-store sales.

Stifel Nicolaus analyst Steve West recommends investors stay away from casual dining stocks, as they will face high commodity costs through 2009 and will likely report disappointing Q3 results. Barclays Capital's Jeffrey Bernstein says commodity costs trends will likely be the focus of the Q3 results since most casual dining companies are now working to secure contracts for the commodities they need in 2009. As consumers cut back on discretionary spending, Bernstein believes companies such as P.F. Chang's are "most at risk" due to weak traffic figures.