Stoney River Steakhouse and Grill Performs Well in Second Quarter | Food Newsfeed

Stoney River Steakhouse and Grill Performs Well in Second Quarter

August 08, 2016 Industry News
Industry News

J. Alexander’s Holdings, Inc. reported financial results for the second quarter and six months ended July 3.

Second Quarter 2016 Highlights Compared To The Second Quarter Of 2015

Net sales increased $830,000, or 1.6 percent, to $53,921,000 from $53,091,000 in the second quarter a year ago.

For the J. Alexander’s/Redlands Grill restaurants, average weekly same store sales per restaurant were $108,300, down 1.8 percent from $110,300 reported in the second quarter of 2015, and for the Stoney River Steakhouse and Grill restaurants, average weekly same store sales increased to $68,700, or 1.8 percent, from $67,500 reported in the second quarter of 2015. The most recent period marked the eighth consecutive quarter of increases in same store sales for Stoney River Steakhouse and Grill.

Income from continuing operations before income taxes totaled $1,684,000 during the second quarter of 2016 compared to $785,000 in the second quarter of 2015. The results for the second quarter of 2015 were impacted by non-recurring transaction expenses of $2,051,000 associated with the abandonment of a planned initial public offering, and the ultimate spin-off from Fidelity National Financial Ventures, LLC (FNFV) in 2015, both described in previous quarters. The results for the second quarter of 2016 included $15,000 of non-recurring transaction expenses. Excluding these non-recurring transaction expenses, income from continuing operations before income taxes would have totaled $1,699,000 for the second quarter of 2016 and $2,836,000 for the second quarter of 2015. The results also included an income tax provision of $486,000 in the second quarter of 2016 and an income tax benefit of $61,000 in the corresponding quarter of 2015.

Net income for the second quarter of 2016 totaled $1,087,000, up 46.7 percent from net income of $741,000 recorded in the comparable quarter of 2015.

Restaurant Operating Profit Margin was 12.4 percent for the second quarter of 2016 as compared to 13.3 percent in the second quarter of 2015.

Cost of sales as a percentage of net sales in the second period of 2016 decreased to 32.2 percent from 32.3 percent during the corresponding quarter a year ago.

Chief Executive Officer’s Review/Second Quarter

“We continued to face stiff headwinds of a difficult operating environment in the quarter just ended,” says Lonnie J. Stout II, president and chief executive officer of J. Alexander’s Holdings, Inc. “Same store sales performance in our large metropolitan markets was positive. However, we still posted a decrease in same store sales in most of our small and mid-sized markets.

“At the beginning of the year, we initiated several programs to reverse guest count losses experienced in the latter part of 2015,” Stout continues. “We are pleased with the initial success of these programs as reflected in the higher guest counts achieved in the second quarter.” Stout said that guest counts within the same store base at the company’s combined J. Alexander’s/Redlands Grill restaurants increased 0.2 percent for the second quarter of 2016 compared to the comparable quarter of 2015 after declining by 1.5 percent during the first quarter of 2016 on a comparable basis to the corresponding quarter in 2015. Guest counts within the same store base at the company’s Stoney River Steakhouse and Grill increased by 1.6 percent in the second quarter of 2016 after a modest decline of 0.5 percent in the first quarter of 2016.

“Our Stoney River Steakhouse and Grill concept continues to perform well,” Stout comments. “It turned in its eighth consecutive quarter of same store sales increases through July 3, 2016.” As announced earlier this year, the Company opened its 11th Stoney River Steakhouse and Grill in Germantown, Tennessee, (near Memphis) and on July 29, 2016, announced the signing of a lease to develop a new Stoney River Steakhouse and Grill in Chapel Hill, North Carolina.

The company’s consolidated operating income for the most recent quarter was $1,822,000 compared to $1,098,000 recorded in the second quarter of 2015. The company’s effective tax rate for the second quarter of 2016 was 30.9 percent as compared to a benefit of 9 percent in the second quarter of 2015.

Restaurant labor and related costs as a percentage of net sales was 30.8 percent as compared to 30.6 percent in the comparable quarter a year earlier. Other restaurant operating expenses were 20.5 percent of net sales as compared to 20 percent of net sales in the corresponding quarter a year ago.

Average guest checks, which include alcoholic beverage sales, for the combined J. Alexander’s/Redlands Grill concepts decreased 1.9 percent to $29.86 in the second quarter of 2016 compared to $30.44 in the corresponding quarter of 2015. Average guest checks for the Stoney River Steakhouse and Grill concept were down 4 percent to $43.13 in the second quarter of 2016 from $44.95 in the second quarter of 2015. The effect of menu price adjustments for the quarter just ended was estimated to be a 0.4 percent decrease for the J. Alexander’s/Redlands Grill restaurants and a 0.1 percent decrease for the Stoney River Steakhouse and Grill restaurants compared to the same period a year earlier. Deflation in food costs for the second quarter of 2016 was estimated to total 2.2 percent for the J. Alexander’s/Redlands Grill restaurants, with beef costs declining by approximately 6.1 percent compared to the second quarter of 2015. For the Stoney River Steakhouse and Grill restaurants, deflation for the second quarter of 2016 was an estimated 2.8 percent, due in large part to an estimated 5.4 percent decline in beef costs on a comparative basis.

Stout points out that J. Alexander’s Holdings, Inc. is now incurring certain fees and expenses as a public company that did not exist in earlier years while the company was a majority-owned subsidiary of FNFV.

First Half 2016 Highlights

For the first 26 weeks of fiscal 2016, the company recorded net sales of $110,800,000, up 1.4 percent from $109,275,000 during the comparable two quarters of fiscal 2015. The New Year’s Eve week, traditionally one of the Company’s strongest sales weeks, occurred twice during fiscal 2015, which had a positive impact on both the first and fourth quarters of fiscal 2015. Fiscal 2016 began January 4, 2016 and, as such, did not receive the benefit of the New Year’s Eve week during the first half of fiscal 2016. Income from continuing operations before income taxes was $4,683,000 for the first half of 2016 compared to $5,746,000 for the first six months of 2015. Included in the results were non-recurring transaction expenses of $62,000 in the first half of 2016 and $2,113,000 in the corresponding two quarters of 2015. Excluding these non-recurring transaction expenses, income from continuing operations before income taxes would have totaled $4,745,000 for the first six months of 2016 and $7,859,000 for the corresponding six months of 2015. Results also included an income tax provision of $1,089,000 in the first two quarters of 2016 and $21,000 in the first half of 2015.

The company recorded net income of $3,377,000 for the first six months of 2016 compared to $5,514,000 in the first six months of 2015.

Within the J. Alexander’s/Redlands Grill restaurants, average weekly same store sales per restaurant totaled $111,600 for the first half of 2016, down 2.4 percent from $114,400 in the first half of 2015. For the Stoney River Steakhouse and Grill restaurants, average weekly same store sales totaled $71,900, up 1.3 percent from $71,000 during the first six months of 2015.

Guest counts within the same store base of restaurants decreased by 0.6 percent within the J. Alexander’s/Redlands Grill restaurants for the most recent six-month period, and climbed by 0.6 percent within the Stoney River Steakhouse and Grill restaurants in the first half of 2016. The average guest check at the combined J. Alexander’s/Redlands Grill locations decreased by 1.7 percent, from $30.73 during the first half of 2015 to $30.20 during the first two quarters of 2016, while the Stoney River average guest check decreased by 2.9 percent, from $45.38 to $44.05 during the same comparable periods. The effect of menu price changes for the first half of 2016 was estimated to be a 1 percent decrease at J. Alexander’s/Redlands Grill locations and a 0.2 percent increase at the Stoney River restaurants compared to the first half of 2015.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.