McCormick & Schmick’s continues to struggle
McCormick & Schmick’s Seafood Restaurants on Thursday reported its second-quarter results.
The struggling upscale seafood chain posted a 1.1 percent drop in revenues to USD 88.7 million and 2.7 percent drop in same-restaurant sales.
The Portland, Ore.-based company also posted a net loss was USD 3 million in the second quarter of 2011, which includes impairment, restructuring and other charges of USD 2.5 million and expenses related to the unsolicited tender offer, potential sales process and evaluation of its strategic alternatives of USD 1.8 million. That’s compared to a net gain of USD 1.3 million in the second quarter of 2010.
“Although we are discouraged by the pace of recovery in a portion of our portfolio, we are encouraged by the positive results we are seeing in both sales trends and guest satisfaction scores as a result of our integrated strategic revitalization program,” said Bill Freeman, CEO of McCormick & Schmick’s.
“Specifically, our newly remodeled properties are generating comparable sales trends that exceed both their regional counterparts and the company as a whole, and they are on track to deliver ROIs above our 20 percent hurdle rate.,” he added. “We remain committed to the long-term revitalization of our business. By delivering value to our guests, investing in service and hospitality initiatives, and remodeling our facilities, all of which will have an ongoing positive impact on our guest experience, we believe we will continue to provide long-term value to our stockholders.”
In the second quarter of 2011, McCormick & Schmick’s completed the first four of its restaurants remodels planned for 2011 as part of its strategic revitalization project, announced in March. The company also announced that it closed its M&S Grill location in Minneapolis and did not renew the lease at its Bethesda, Md., restaurant. The company now operates 92 restaurants, including 85 in the United States and seven in Canada under The Boathouse banner.
As far as the unsolicited tender offer, Tilman Fertitta, chairman, president and CEO of Landry’s Restaurants, withdrew his bid to acquire McCormick & Schmick’s after the company agreed to open its books for a possible negotiated sale. In April, Landry’s had launched a bid for the chain for USD 9.25 a share, but McCormick & Schmick’s rejected the USD 137.2 million bid, saying it “undervalues” the chain.