Rare Hospitality Heads for Strong 2Q

Same-store sales of restaurants open at least one year were up 1.5% at the LongHorn Steakhouses; up 4.1% at the Capital Grilles; and up 3% at the Bugaboo Creek restaurants.

"Rare produced these increases in spite of the impact on sales of the slowing national economy which has affected the overall casual dining industry," Philip J. Hickey Jr., the company's chairman/CEO, says in a prepared statement.

However, higher utility costs and fewer diners will affect the company's earlier expectations of earnings in the 34 cents to 35 cents-per-share range. Instead, expected second-quarter earnings will be 31 cents to 33 cents per diluted share.

"Although Rare has experienced lower guest counts than originally expected during the second quarter-to-date, our leading indicators, such as mystery shopper scores and management retention, have remained strong," Hickey says.

The company's development plan for 2001 remains on track with 13 restaurants opened and nine currently under construction.

"We have a stronger balance sheet than at virtually any other time in the company's history," the chairman/CEO says in his statement.

For the first quarter ended April 1, net earnings before non-recurring items, rose 33.9% to $9.23 million from $6.89 million in first quarter 2000. Diluted earnings per share increased 16.2% to 43 cents from 37 cents in the comparable 2000 period.

Total revenue in first quarter 2001, a 13-week period, was $135 million, up 12% from $120 million in first quarter 2000, a 14-week period.

"We strongly believe that consistent, high-quality performance within our restaurants will result in the company's continued, long-term profitable growth," Hickey says.

The company owns, operates and franchises 184 restaurants, including 149 LongHorn Steakhouses, 19 Bugaboo Creeks and 14 Capital Grilles.

The Nasdaq-traded firm's common stock closed Wednesday at $20.95 per share on volume of 3,729,500, down $2.70 (11.42%) for the day. It's 52-week high-low range is $32 to $14.83.