For Immediate Release
Chicago, IL – August 11, 2010 – Zacks.com Analyst Blog features: Saks Inc. (SKS), Landry's Restaurants Inc. (LNY), Buffalo Wild Wings Inc. (BWLD) BJ’s Restaurants Inc. (BJRI) and Union Pacific Corp. (UNP ).
Here are highlights from Tuesday’s Analyst Blog:
Saks Reports Higher Sales
Saks Inc. (SKS) reported total sales of $167.9 million for the month of July 2010, which was 4.8% higher than $160.2 million in the same period a year ago. The company’s comparable store sales grew 6.4% for the month.
During the four week period, the company saw growth in women’s shoes and sportswear, handbags, dresses, men's apparel, footwear and accessories. However, in the months of May and June, Saks spent less on promotional activity.
Saks’ sales totaled $583.4 million for the second quarter. On a quarter-to-date basis, sales were up 4.8% from $556.4 million posted in the comparable period of last fiscal year. Comparable store sales jumped 4.6% for the quarter. This was due to a 2.5% rise in comparable store sales in June and a 5.8% leap in comparable store sales in May.
The company now estimates comparable store sales growth in the mid-single digit range for fiscal 2010, including single digit expansion in the second quarter and mid-single digit increase in the second half of the fiscal year. ?
For the first six months of fiscal 2010, the company’s sales were $1.24 billion, compared to $1.17 billion in the same period of fiscal 2009, representing a year-over-year rise of 5.9%. Year-to-date comparable store sales climbed 5.4%. ?
Saks will announce its second quarter results on Aug 17, 2010. Saks should see a substantial improvement in sales in the quarter as the company reported a rise in sales in all the three months of the quarter. However, given the uncertainty in the economy, customers are still staying away from discretionary purchases.
Landry’s Posts Mixed Q2
Landry's Restaurants Inc. (LNY) reported second-quarter 2010 adjusted loss of 1 cent per share, much lower than the Zacks Consensus Estimate of earnings of 25 cents and the year-ago quarterly profit of 20 cents. On a GAAP basis, net loss per share was 87 cents versus net earnings of 41 cents recorded in the comparable quarter last year.
The reported quarter includes expenses like impairment charge, litigation settlement charge and transaction merger cost. However in the year-ago quarter, the company recorded a benefit related to asset sales and insurance proceeds.
Total revenues climbed 4.5% year-over-year to $294.6 million and also topped the Zacks Consensus Estimate of $288.0 million. Sales at Restaurant and Hospitality group rose 5.1% to $236.9 million, despite being hurt by the Gulf oil spill at its three locations. Gaming revenues grew 2.1% to $57.7 million in the reported quarter. However, the industry continues to struggle with lower consumer spending and excess supply, which is impacting pricing strength. Same store sales for company-operated restaurants were flat year over year.
Adjusted EBITDA of the company inched up only 0.4% from the prior year quarter to $52.9 million. Adjusted EBITDA of Restaurant and Hospitality group climbed 3.5% to $41.9 million and of gaming operations dropped 8.2% to $11.0 million.
Interest expense for the quarter increased 3.5% to $29.5 million, attributed to higher borrowings from the company for the construction of the new Rush Tower at the Golden Nugget.
Operating margin contracted 660 basis points (bps) to 5.8%, due to a major rise in general and administrative expenses. Additionally, other costs like labor expense, depreciation and amortization, cost of revenue and other operating expense also increased.
Financial Position
Landry's Restaurants ended second quarter 2010 with cash and cash equivalents of $59.5 million and shareholders’ equity of $302.6 million. Long-term debt of the company reduced to $1.0 billion in second quarter 2010 from $1.1 billion in second quarter 2009.
Landry's Restaurants’s close competitors Buffalo Wild Wings Inc. (BWLD) and BJ’s Restaurants Inc. (BJRI) reported their second quarter earnings, which were higher than the Zacks Consensus Estimate. Buffalo’s second quarter 2010 earnings of 50 cents per share were ahead of the Zacks Consensus Estimate of 42 cents. Even BJ’s second quarter earnings of 23 cents topped the Zacks Consensus Estimate of 20 cents.
Earnings Scorecard: Union Pacific
Railroad giant Union Pacific Corp. (UNP ) reported excellent results for the second quarter 2010, beating the Zacks Consensus Estimate by 19 cents. Overall, the analysts are bullish on the stock, given the company’s impressive results.
The impressive performance was driven by a robust operating ratio, strong growth in business volume, cost efficiency and pricing gains. Second quarter operating ratio came in at a historic high-level of 69.4% compared with 77.4% in the prior-year quarter. This is the first time that Union Pacific achieved a sub-70 benchmark.
Second Quarter Highlights
Net income surged to a record high of $711 million or $1.40 per share from $465 million or 92 cents per share in the year-ago quarter. Second quarter EPS was well ahead of the Zacks Consensus Estimate of $1.21.
Consumer Satisfaction Index was 89% compared with 87% in the year-ago quarter. Business volume (measured by total revenue carloads) was 2.18 million, up 18% year over year.
Total operating revenue was $4,182 million, up 27% year-over-year and also ahead of the Zacks Consensus Estimate of $4,097 million. Within this, total Freight revenue was $3,956 million, up 27% year over year.
Agreements of Analysts
In synergy with the company’s impressive results, the recent Zacks Consensus Estimate revision trend for EPS remains positive. Out of 24 analysts covering the stock, 22 revised their estimates upward for the third quarter of fiscal 2010 over the last 30 days. Similarly, for the fiscal year 2010, 23 of 24 analysts raised their estimates. None of the analysts revised their EPS estimates downward.
Union Pacific represents an attractive long-term investment with a diversified commodity mix and the largest tailwind from legacy contract re-pricing of any Class I rail. Furthermore, Union Pacific remains committed to making long-term investments in the companies that support operating efficiencies, growth and returns. Given the backdrop of positive pricing growth, improving volumes and continued productivity gains, management reiterated its target of achieving a low-70s operating ratio by 2012 (from 76.0% in FY09).
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