Morton Hears an IPO Hoot

Hear that sizzle? That's Morton's Restaurant Group coming back for seconds. The parent of upscale steakhouse Morton's of Chicago filed to go public over the weekend. It would be the company's second time as a publicly traded entity; Morton Restaurant Group traded for years until it was taken private in 2002.

True, the recent IPO success of companies like Texas Roadhouse (Nasdaq: TXRH  ) and Ruth's Chris Steak House (Nasdaq: RUTH  ) have made restaurant investors forget about some less-memorable steakhouse market debuts, like Smith & Wollensky (Nasdaq: SWRG  ) and Roadhouse Grill. There was a time when, if your name wasn't Outback Steakhouse (NYSE: OSI  ) or LongHorn parent RARE Hospitality (Nasdaq: RARE  ) , you just weren't being loved. Now, even fallen favorites like Lone Star Steakhouse (Nasdaq: STAR  ) have discovered a new lease on public life.

The timing of the company's return to Wall Street scrutiny could have been better, though. Morton's is coming to market after posting a small loss through the first nine months of the year. It closed out 2004 in the red as well. That may be how some steak lovers prefer their cuts, but it's certainly not a welcome sight on an income statement.

Morton's bloodied numbers are a shame. The company, which relies on business diners for just about all of its weekday traffic and for a significant chunk of its weekend crowd, should be doing better than this. The economy has been bouncing back, and companies like Ruth's Chris are doing just fine. RARE's Capital Grille has sported higher comps for 14 consecutive quarters. If Morton's was expecting to turn consistently profitable over the next few quarters, it should have just waited until then for the IPO. If that wasn't going to happen, then it probably has no business tapping the public for capital anyway.

Good luck, Morton's. You won't see me digging into this offering, but it will make it that much easier to evaluate the disparity between a Ruth's Chris and a Smith & Wollensky.

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Longtime Fool contributor Rick Munarriz has eaten at Ruth's Chris before, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.