J. Alexander’s Corporation has reported operating results for the first quarter ended April 3, 2011.
A summary of the first quarter of 2011 compared to the first quarter of 2010 follows:
- Net sales increased 5.2% to $40,749,000 from $38,725,000.
- Average weekly same store sales per restaurant increased by 5.5%.
- Income before income taxes increased 26.9% to $1,372,000 from $1,081,000 in the first quarter of 2010.
- Income tax expense was $310,000 for the first quarter of 2011 compared to $284,000 in the first quarter of 2010.
- Net income increased by 33.2% to $1,062,000 from $797,000 in the first quarter of 2010, and earnings per diluted share increased to $.18 from $.13 in the comparable quarter of 2010.
Commenting on results for the first quarter of fiscal 2011, Lonnie J. Stout II, Chairman, President and CEO, said, “The first quarter just ended was another period of solid improvement in our financial performance. We are pleased with overall results, which included our sixth consecutive quarter of same store sales growth. We believe our same store sales performance continues to be among the best in the upscale casual dining segment of our industry.”
For the first quarter of 2011, J. Alexander’s Corporation recorded average weekly same store sales per restaurant of $95,300, up from $90,300 in the corresponding quarter a year earlier. The Company’s average weekly sales per restaurant for the first quarter of 2011 were the same as the same store average because same store sales calculations are based on restaurants open for more than 18 months and no new restaurants have opened since December of 2008. The 5.5% increase in average weekly same store sales per restaurant for the first quarter of 2011 compared to the first quarter of 2010 was greater than the 5.2% increase in total net sales because of the exclusion from the weekly average calculation of a total of ten restaurant days that certain restaurants were closed due to inclement weather in the first quarter of 2011.
J. Alexander’s Corporation reported an increase of 0.7% in average weekly guest counts per restaurant from the comparable period of 2010. The average guest check, including alcoholic beverage sales for the quarter rose 4.5% to an estimated $26.36 from approximately $25.23. The effect of menu price increases for the quarter just ended was approximately 2.6% compared to the same period a year earlier.
The Company’s increases in same store sales contributed to lower labor and related costs and other restaurant operating expenses as percentages of net sales during the first quarter of the current year compared to the first quarter of 2010. Total labor and related costs decreased from 33.1% of net sales to 32.4% of net sales. Other restaurant operating expenses decreased to 20.6% of net sales from 21.8% of net sales.
Cost of sales increased to 33.0% of net sales for the first quarter of 2011 from 31.5% of net sales in the corresponding quarter of the previous year.
For the first quarter of 2011, J. Alexander’s Corporation’s restaurant operating margins (net sales minus total restaurant operating expenses divided by net sales) increased to 10.4% from 9.6% in the same period of 2010.
“The sharp rise in input costs in several food categories has been and continues to be a significant concern,” Stout noted. “For the first quarter, our food input costs rose by about 8% from the corresponding period in 2010. “Produce costs in the quarter just ended climbed more than 20% over the same quarter a year ago, while seafood and beef prices increased approximately 9% and 7.5%, respectively. “
Stout said that J. Alexander’s Corporation is implementing a plan to offset some of the Company’s higher input costs. He said the plan includes reformatting the Company’s menus to include separate lunch and dinner menus in each restaurant as well as modest menu price increases primarily on some of the Company’s dinner menu items.
“We are working as diligently as we can to manage our input costs,” Stout emphasized, “but we will not pursue any measure that could diminish the dining experience of our guests. As always, our primary focus will be to provide our guests with the highest quality and freshest products possible.”
Stout said the Company’s same store sales trends in the second quarter to date have remained favorable and generally in line with those of the first quarter. “Based on our recent trends we are encouraged about the prospects for continued same store sales growth in the second quarter,” Stout observed. “We do remain somewhat concerned, however, about the possible negative impact that higher gasoline prices and potential volatility in consumer confidence levels could have on our sales trends. “
J. Alexander’s Corporation operates 33 J. Alexander’s restaurant in thirteen states: Alabama, Arizona, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan, Ohio, Tennessee and Texas. The Company’s menu features a wide selection of American classics, including steaks, prime rib of beef and fresh seafood, as well as a large assortment of interesting salads, sandwiches and desserts. J. Alexander’s also has a full-service bar that features an outstanding selection of wines by the glass and bottle.
J. Alexander’s Corporation is headquartered in Nashville, Tennessee.