Thursday, October 10, 2013
Saizeriya's Bottom Line Drops 28% On Higher Costs
TOKYO (Nikkei)--Restaurant group Saizeriya Co.'s (7581) net profit sank 28% in the year ended Aug. 31, falling for a third straight year as a weak yen drove up supply costs.
The company reported a group net profit of 3.9 billion yen Wednesday.
Group sales rose 6% to 110.4 billion yen, but same-store sales at its namesake Italian restaurant chain fell nearly 2%. The start of a discount lunch menu of 500-yen items in April resulted in a drop in sales per customer. New restaurant openings offset the decline, while a 40% jump in sales in the group's Chinese operations also helped lift the overall figure.
A weak yen made beef, cheese and other imported goods dearer. Higher write-offs on money-losing restaurants and depreciation on a new food preparation facility also weighed on profits. Saizeriya's cost-to-sales ratio worsened by nearly 2 percentage points to about 35%, with higher spending on employee training and energy also taking a toll.
Saizeriya does not plan to raise the prices of its 500-yen lunches and certain other items in response to a consumption tax hike next April, President Issei Horino told a news conference Wednesday.
The company sees restaurant openings continuing to offset weak sales in the current fiscal year and expects a decline in write-offs. It projects net profit to climb 30% to 5.1 billion yen.
(The Nikkei, Oct. 10 morning edition)