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Follow me on Twitter: https://twitter.com/MattBerry01 I'll be publishing on my blog from now on. I usually send my reports through a newsletter first. Join the mailing list at http://www.3footcrowbar.com/ Interests: -- reading up on bounded rationality, behaviorism, and philosophy -- writing... More
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  • J. Alexander's Restaurant reports stronger second quarter  0 comments
    Aug 13, 2010 5:27 PM | about stocks: BJ, TXRH, KONA, BNHNA, DRI, MCD, DAVE, BWLD, RRGB
    http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100813005892&newsLang=en

    J. Alexander's Corp usually has weaker second and third quarters and stronger first and fourth quarters, so a breakeven net income is a decent showing for the second quarter 2010.   Last year JAX suffered a twelve cent loss, partly due to the economy but also due to a legal settlement with an employee.  (Evidently one person had been excluded from a "tip share pool." This problem was restricted to a single restaurant.)

    This year, with no such legal difficulty, a negative income before taxes and a favorable tax benefit cancelled each other out and JAX ended the quarter at zero EPS.  Looking at the tax provisions previously set up (see most recent 10k) we might find a favorable influence on JAX going forward if those are reversed. 


    Some good news in the report ...
    • Net sales increased 4.7% to $36,336,000 from $34,710,000.
    • Average weekly same store sales per restaurant advanced 4.7%
    • Prices were raised and there are plans to raise them further (albeit modestly)
    • Guest counts are up
    • Average check is up
    One negative point: commodity prices have risen and added some friction to otherwise improving margins.   (Surprisingly, there was no mention of the Nashville flood.)

    Overall it was a good quarter, as CEO Lonnie Stout summed it,

    “We are seeing signs of recovery in the upscale segment of the restaurant industry. Our goal is to make sure we have our fair share of the business.

    “Our outlook is considerably brighter than at this point a year ago. We enter the final half of 2010 with a very positive pace of sales momentum. We are confident in our ability to continue to improve the performance of our restaurants even in a fragile economic recovery.” 

     



    Disclosure: LONG JAX

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