Frisch's Restaurants (NYSEMKT:FRS) reported EPS in Q4 of $0.70, which beat expectations by $0.26 and is a big jump from the $0.45 earned last year. Revenues rose 9.8% year-over-year to $53.56 million. The large jump in revenues was due to 13 weeks in the quarter compared to last year. Same-store sales increase just slightly by 0.7%. One problem Frisch's is still having is related to margins. I talked about margins remaining stagnant in my article last December. In the earnings release, Frisch's said:
"The margin from restaurant operating income from continuing operations in the fourth quarter declined marginally on higher payroll and health care costs while administrative and advertising expense increased due to lower returns on non-qualified pension assets in comparison to the prior year."
Full year results saw revenues increase 2.7% due to 53 weeks in the fiscal year. Revenues came in at $209 million for the year. Because of certain tax planning strategies, Frisch's recorded a big jump in earnings. Frisch's earned $1.85 per share versus $1.38 last year.
As I talked about in my last article, I think there are better places in the restaurant industry to put your money than Frisch's. The company is opening only one new restaurant a year on average. Its 3.1% dividend yield is already a 43% payout of earnings. The one value to owning the company is it owns the land and building for 80 of its restaurants. That does provide downside protection, but without a growth plan going forward, shares of Frisch's look like dead money to me.
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