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

P.F. Chang's China Bistro (PFCB) is expected to report Q4 earnings Wednesday with a conference call scheduled for 12:00 p.m. ET.

Guidance

Analysts are looking for a profit of 33c on revenue of $292.26M. The consensus is 28c to 33c for EPS, and revenue of $288.1M to $292.6M, according to First Call. P.F. Chang's raised its Q4 EPS expectations to 32c to 34c, excluding an 8c per share charge related to the company's Taneko Japanese Tavern, and said it sees 2008 EPS of $1.28 to $1.30, excluding the 8c, vs. First Call consensus of $1.29. The company reported Q4 consolidated revenues of $292.6M.

P.F. Chang's said results were driven by strong December sales and a favorable group medical and workers' compensation adjustments. Restaurant-chain stocks have slumped as concern persists of softening sales due to higher food costs, higher gas prices and the slumping housing market.

Analyst Views

Goldman Sachs said slower growth and a weakening labor market is likely to delay a rebound in the restaurant industry. Bear Stearns recently downgraded the restaurant industry to Market Underweight from Market Weight, as they believe earnings pressure will continue, and that valuations are not as low as current expectations imply. They are most concerned about P.F. Chang's. Friedman Billings believes the company's operating costs are significantly higher than estimated.