Japanese restaurant operator Benihana (NASDAQ:BNHN) (NASDAQ:BNHNA) had another strong quarter. Total sales increased 13%, and net income, at $0.44 a share, was 2.3 times higher than the comparable quarter last year. Lower beef and shrimp prices, along with strong restaurant traffic, helped blow away the mean analyst estimate of $0.36 per share and handily topped the highest forecast of $0.41.
The teppanyaki restaurants (78.5% of total sales this quarter) saw same-store sales increase 8.5%, thanks to a 2.5% to 3% increase in menu prices and a 4.7% increase in guest count. Dining Japanese-style is definitely catching on.
The standout was RA Sushi (9.6% of total sales), where comparable sales increased 25% on a 22.2% increase in guest traffic. Sushi dining is hot, even if the food isn't.
The news for next quarter is not as robust, although same-store sales are expected to increase a solid 4% to 5%. Analysts were expecting $0.24 a share, but the company is forecasting $0.20 to $0.22. Earnings per diluted share will be affected by the issuance of convertible preferred shares and the flood of option holders cashing in their low-priced options.
This is a small company, with only 10.3 million fully diluted shares outstanding. But with a rock-solid balance sheet, the company offers a unique product that the stock market has not yet overpriced relative to its restaurant peers.
The recent good news at Benihana has sent the stock to an all-time high. Heck, it's up 53% over the last 52 weeks, which pummels the 7.7% gain in the S&P 500. Still, the company is expected to earn $1.25 this year, and is trading at an affordable 16.0 times forward earnings -- slightly below the forward multiple garnered by Applebee's (NASDAQ:APPB), Darden (NYSE:DRI), and Brinker (NYSE:EAT), and well below the 18.1 multiple commanded by Outback Steakhouse (NYSE:OSI).
The recent results at Benihana have been excellent. Better yet, there isn't a Japanese restaurant on every corner. When consumers want something delectably different and decidedly uncommon, Benihana is ready to provide the experience.
Fool contributor W.D. Crotty does not own shares in any of the companies mentioned -- but wishes there were a Benihana closer than Orlando. Click here to see The Motley Fool's disclosure policy.
