P.F. Chang's Earnings Preview

If P.F. Chang's China Bistro (Nasdaq: PFCB  ) misses estimates again it will be the third consecutive quarter for the company. The company will unveil its latest earnings on Thursday. P.F. Chang's China Bistro owns and operates restaurant concepts in the Asian niche.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on P.F. Chang's China Bistro with 10 of 19 analysts rating it hold. Analysts don't like P.F. Chang's China Bistro as much as competitor Bravo Brio Restaurant Group overall. Six out of six analysts rate Bravo Brio Restaurant Group a buy compared to six of 19 for P.F. Chang's China Bistro. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $308.3 million in revenue this quarter. That would represent a decline of 0.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.45 per share. Estimates range from $0.39 to $0.48.

What our community says:
The majority of CAPS All-Stars see PFCB as a good bet, with 61.3% assigning it an outperform rating. The majority of the Fools agree with the All-Stars, with 60.3% giving it an outperform rating. Fools are gung-ho about P.F. Chang's China Bistro and haven't been shy with their opinions lately, logging 136 posts in the past 30 days. P.F. Chang's China Bistro's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
P.F. Chang's China Bistro's income has fallen year-over-year by an average of 6.2% over the past five quarters. Revenue has fallen in the past two quarters. The company's gross margin shrank by 2.9 percentage points in the last quarter. Revenue fell 2.5% while cost of sales rose 0.9% to $252.8 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. In the last two quarters, P.F. Chang's China Bistro has experienced a dip in operating margins year-over-year. Operating margins reflect the total sales revenue that the company retains after costs. See how P.F. Chang's China Bistro has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

15.9%

16.8%

17.4%

18.7%

Operating Margin

3.2%

3.9%

4.8%

5.9%

Net Margin

2.1%

2.9%

3.3%

4.7%

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Earnings estimates provided by Zacks.

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