Benihana Expands, Renovates

The company renovated two of its Benihana Teppanyaki restaurants during the quarter, bringing the total renovated to date to three. The company believes it can "generate a substantial return on invested capital through this rejuvenation program," according to remarks by Joel Schwartz, president and CEO, who was one of the Benihana execs who discussed the first quarter results in the conference call Thursday.

The store activities during the first quarter included the opening of two new RA Sushi restaurants in Palm Beach Gardens, FL and Glenview, IL, along with a new Benihana Teppanyaki restaurant in Miramar, FL. "The Miramar restaurant is our first Teppanyaki unit built based upon our new prototype design, and all of these units are generating very healthy volumes so far," Schwartz commented. The chain currently has 10 other restaurants in various stages of development, he noted.

The reopened locations during the first quarter included remodeled Benihana Teppanyaki restaurants in Memphis, TN and Cleveland. Scheduled reopenings include restaurants in Indianapolis and in Anaheim, CA at the beginning of September and plans for new locations include a Benihana that is scheduled to open in Coral Gables, FL in September.

The renovations affected the company's overall business in that locations that were closed temporarily for rejuvenation resulted in an aggregate loss of 53 restaurant operating weeks for the quarter. The chain earned $4.5 million, a slight increase over the first quarter earnings last year, but earnings per share slipped to 40 cents from 44 cents. Same store sales climbed 9.2% as total sales grew by $7.9% to $79.4 million. The 9.2% same store growth included an increase of 7.7% at Benihana Teppanyaki, 18.6% at RA Sushi and 10.6% at Haru.