The financial results released this morning by P.F. Chang's, once one of the industry's over-achievers, are less interesting than the company's projections for 2009: "a significant reduction in average weekly sales" of about 6 percent for both if its concepts. And, actually, that might be good news.
The figures are consistent with the comps posted for P.F. Chang's and Pei Wei Asian Diner for the last three months of 2008. Since the numbers reflect year-over-year comparisons, they suggest the downturn is leveling off. Might the industry be finding the bottom?
The announcement follows several promising additional developments, including yesterday's disclosure by beleagured GE Capital that it has lent $5.8 million to the eight-unit Boston Blackie's casual chain for expansion. Any loan extended to a restaurant company in the current environment is an encouraging sign, given how scarce capital has been. It's especially noteworthy because GE Capital has been the poster company for lenders that have been hurt by the banks' liquidity crisis.
This morning also brought the news that Tremblant Capital, a New York hedge fund, has increased its stake in Chipotle to 5.7%. Clearly the well-known, multi-billion-dollar fund believes shares are under-valued, or soon may be.
Similarly, fund manager John Hussman has greatly increased his stakes in Panera Bread Co. and Starbucks, and purchased shares of Darden for the first time.
A brightening view of restaurant stocks could only help the industry.
Still, the trade has a long way to go before it can claim the recovery is underway. P.F. Chang's profits for the last quarter of 2008 fell about 23%, to just $5.4 million.