Sector Snap: Casual dining slips

A KeyBanc Capital Markets analyst said Wednesday third-quarter same-store sales and profits at casual dining companies were likely hurt by the Olympics, hurricanes, the political conventions and news about the liquidity crisis and bank failures.

Analyst Lynne Collier said in a note to investors those events affected traffic levels in about seven of the 13 weeks in the third quarter of the calendar year.

Collier said same-store sales, or sales at locations open at least a year, fell 3.8 percent during July and August _ the first two months of the quarter _ for the casual dining industry, according to Knapp-Track. Knapp-Track collects monthly sales data from more than 10,000 restaurants.

She said major news and weather events in September "provide little opportunity for improvement in the final month" of the calendar third quarter.

Based on the lower sales expectations, Collier cut her earnings estimates for one or more quarters for BJ's Restaurants Inc., Chili's Grill & Bar owner Brinker International Inc., California Pizza Kitchen Inc., Cheesecake Factory Inc., P.F. Chang's China Bistro Inc., Ruby Tuesday Inc., Granite City Food & Brewery Ltd. and CBRL Group Inc., which owns Cracker Barrel restaurants and gift shops.

Collier also lowered her rating on shares of California Pizza Kitchen to "Hold" from "Buy," citing her expectations for slower sales and a lack of "near-term catalysts" that would push profits higher.

Shares of California Pizza Kitchen dipped 45 cents, or 3.5 percent, to $12.43 in afternoon trading.

Shares of Brinker, meanwhile, dipped 3 cents to $17.86 while Cheesecake Factory shares fell 8 cents to $14.54 and Ruby Tuesday shares dropped 7 cents to $5.72.

Shares of P.F. Chang's added 9 cents to $23.34.