First-quarter profits at Del Frisco's Restaurant Group declined by 28 percent as sales growth was soft and the Southlake-based steakhouse chain spent money to open new units, the company said today.
Net income totaled $3.6 million, or 15 cents per diluted share, compared to $5 million, or 18 cents a year ago, a year ago.
Consolidated revenue was up 13 percent to $59.8 million, including five new restaurants added since the first quarter of 2012. But total comparable restaurant sales decreased by 0.5 percent, including a decline of 4 percent at Sullivan's and a gain of 1.9 percent at Del Frisco's.
CEO Mark S. Mednansky said sales were soft early in the quarter due to macro-economic factors and adverse weather affecting some high-grossing locations, but picked up significantly during March. "In fact, all three brands generated positive traffic during the last four weeks of the first quarter and that momentum continued into our April fiscal period as well," Mednansky said in a statement.
While new restaurants are performing well "from a top-line perspective," they did weigh down profits during the quarter, Mednansky said, and the company "did not efectively manage operating costs when sales were softest, particularly at Sullivan's."
The company reiterated guidance for fiscal 2013, predicting comparable restaurant sales growth of 1.5% to 2.5%, and adjusted earnings per share of 92 to 96 cents.
As of March 19, Del Frisco's Restaurant Group operated 10 Del Frisco's, 19 Sullivan's and 6 Del Frisco's Grille locations.
-- Steve Kaskovich