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What: Shares of Del Frisco's Restaurant Group Inc (NASDAQ:DFRG) were slipping Tuesday, down as much as 18% after the restaurant chain delivered an unsavory earnings report Tuesday morning.
So what: Del Frisco's, which is the parent of Del Frisco's Double Eagle Steak House, Sullivan's Steakhouse, and Del Frisco's Grille, said same-store sales grew by 2.2% in the quarter, and overall revenue rose 11.6% to $67.4 million, which was short of analyst expectations at $69.1 million. The bottom line, meanwhile, was off by a penny as Del Frisco posted earnings of $0.20 per share, up from $0.19 a year earlier.
Now what: The results for the quarter weren't too far off the mark, but what really seemed to kill the stock Tuesday was management's decision to lower full-year EPS guidance from $0.94-$0.98 to $0.90-$0.94, below the analyst consensus at $0.96. CEO Mark Mednansky said the company was taking a more "cautious view" for the back half of the year as several restaurant openings have been delayed and the company reduced forecasts at two locations. Del Frisco's has big plans for expansion, but the opening delays and mediocre guidance are concerning. Management said the delays are a temporary issue, but I'd like to see stronger comps out of a chain planning on growing so fast. (NASDAQ: AAPL)