The glitzy, upscale Chinese restaurant, which wooed investors last decade with its rapid growth story, still generates more sales dollars than most of its competition. However, it’s not doing so well compared to its own past performance, and other casual-dining chains are seeing improved same-store sales. P.F. Chang’s hopes more menu innovation, ramped-up marketing efforts and restaurant remodelings will help stop the loss of market share.
However, investors willing to hang on for the upside may have to wait a while. The company recently cut full-year earnings guidance and warned of 2% to 3% declines in comparable-store sales, or sales at company-owned restaurants open at least 18 months, of at the Bistro and quick-casual chain Pei Wei Asian Diner. The stock is down nearly 30% over the past year, closing Tuesday at $29.91.
P.F. Chang’s opened its first namesake Bistro in 1993, followed by Pei Wei in 2000. The concepts quickly became two of the major growth stories in the industry, said Bryan Elliott, restaurant analyst at Raymond James.