Q2 2008 net income reached $9.4 million, slightly above earlier estimates and an improvement from $9.3 million in Q2 2007. However, comparable store sales declined 2.3% at its namesake China Bistro restaurants and 3.2% at Pei Wei restaurants during the quarter because of lower levels of consumer spending.
Net income for the company in Q1 2008 reached $9.6 million, slightly less than the $10.5 million earned during the same period a year earlier. Comparable store sales increased 0.1% during the quarter at China Bistro restaurants mainly because of a 6% increase in menu prices. Also, comparable store sales declined about 2.4% at Pei Wei restaurants despite slight price increases.
The company's Q4 2007 net income reached $9.3 million, compared to $9 million in Q4 2006. However, the company's net income decreased to $32 million in 2007, from $33.2 million in 2006. Furthermore, higher operating expenses, primarily increased costs of ingredients and wage rates caused the company's operating margin to decrease approximately 1.1% during 2007 to 4.7%. As a result, the company has scaled back expansion plans about 26% for 2008.
Total revenue increased 16.6% during 2007, mainly due to an increase in the amount of restaurants. However, comparable store sales dropped 1.6% at China Bistro restaurants and remained flat at Pei Wei restaurants.
Q3 2007 revenue reached $270.8 million, about $2.2 million short of expectations. Overall, comparable store sales decreased 1.6% at China Bistro restaurants and 1% at Pei Wei restaurants despite an average 2.5% menu price increase.
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