Landry's Restaurants (LNY) sees $300 million in second-quarter revenue, and earnings per share short of the Wall Street consensus estimate. BB&T Capital cut its rating on the shares to hold from buy.
Analyst Barry Stouffer says the shortfall is attributed to lower-than-expected June sales in the Joe's Crab Shack division. Stouffer says management blamed the weakness on poor weather, difficult comparisons, and less advertising and promotion. He notes no mention of a same-store sales fall in June in the press release. Stouffer says the second quarter represents the third straight quarterly same-store sales decline, giving him less confidence in his EPS estimatess and the potential for upside surprises. He notes Landry's stock has risen to $23.93 from $18.70 in the last two months, surpassing his $23 target. The analyst cut his EPS estimates for the second quarter from 67 cents to 63 cents, and for 2003 from $1.76 to $1.71.