P.F. Chang's Profit Rises

Both the Bistro and the Pei Wei concepts are performing about as expected, company president Bert Vivian said during Wednesday's conference call, saying that the company's expansion plans for the remainder of 2005 remain unchanged. Those plans call for the company, which operated 116 Bistros and 54 Pei Weis at the end of the first quarter, plans to open 18 new Bistro units and 26 new Pei Wei units in 2005.

For the second quarter, Pei Wei has already opened one restaurant in Austin, TX and plans additional openings this quarter in existing markets of San Antonio, Los Angeles, Oklahoma City and Las Vegas, as well as one new market in Florida. The Bistro chain has opened one store in Baton Rouge, LA, with plans to open in Little Rock, AK, St. Louis, San Jose, CA and Phoenix in the quarter. The company has already signed leases for all of its new Bistros and Pei Wei diners planned for fiscal 2005, developing Bistros that typically range from 6,000 sf to 7,500 sf and require an average total investment of approximately $3.9 million per restaurant. The Pei Wei restaurants are generally 3,000 sf to 3,300 sf and require an average investment of approximately $1.4 million per restaurant.

The company's overall revenue for both chains during the first quarter totaled $194.2 million, up from $164 million in the first quarter of 2004, with comparable store sales rising 2.9% at the Bistro increased on a year-to-year basis and 6% at Pei Wei. The company attributed the Bistro increase to customer traffic growth as well as a price increase of approximately 2%. At Pei Wei, it credited customer traffic growth and a price increase of approximately 1.5%. "In short, we had a pretty good first quarter, both from a revenue and a cost perspective," Vivian said in the conference call.

The P.F. Chang's president said the two restaurant concepts are "working very well together," as illustrated by their performance in Phoenix, the market that has the most Bistros and Pei Weis. Phoenix was also the company's strongest market in the first quarter, Vivian said. "There is clearly a small degradation in the Bistro business when Pei Wei comes into a market, but it's very minor, maybe in the 1% to 2% range. He called the small sales blip "a very positive trade-off" in exchange for the overall increases in sales and profits that result from the presence of both chains in a market.