Benihana shares drop after weak 2Q sales results

Benihana shares drop after it reports 9.9 pct drop in sales at locations open at least a year

• On 2:19 pm EDT, Wednesday October 21, 2009

SAN FRANCISCO (AP) -- Shares of restaurant company Benihana Inc. fell Wednesday, a day after the company said sales at its restaurants open at least a year fell 9.9 percent in its fiscal second quarter.

Benihana owns and operates its namesake teppanyaki restaurants as well as Haru sushi and RA Sushi restaurants. Its shares fell 30 cents, or 4.3 percent, to $6.61 in afternoon trading.

The company said Tuesday that its traditional Benihana restaurants had a 12.2 percent drop at stores open at least a year in its second quarter that ended Oct. 11.

CEO Richard Stockinger said the results were "disappointing even after taking into account the fact that our fiscal second quarter has historically been our softest from a revenue perspective."

The restaurant industry has been stung by the recession as cash-strapped consumers are choosing to eat at home more often.

Benihana also suspended its full-year guidance. Stockinger said the company would offer more details on its next conference call. Previous guidance had been for fiscal 2010 profit of 40 cents to 45 cents per share, KeyBanc Capital Markets analyst Brad Ludington said.

Ludington kept a "hold" rating on the shares but remained cautious because the company suspended its guidance and because costs for a promotional program are weighing on margins. He lowered his fiscal 2010 profit estimate by a penny to 37 cents per share.

Analysts polled by Thomson Reuters expect 38 cents per share.

CL King & Associates analyst Michael Gallo reduced the firm's rating to "neutral" from "strong buy."

"We see little improvement in trends at this point," Gallo told investors in a research report.

Buzz up!