U.S. News

Landry's 1Q results rise on special items


Landry's Restaurants Inc. reported Monday that its net income grew sharply in its first quarter on several one-time gains, but its sales remained soft.

The company, which runs Landry's Seafood House, Rainforest Cafe and other restaurant chains, reported net income of $14.3 million, or 87 cents per share for the quarter that ended March 31. That's up from $7.1 million, or 37 cents per share, in the same quarter last year.

Landry's revenue grew slightly to $258.7 million from $256.3 million.

However, the company saw a key measure of its performance — sales at its restaurants open at least a year — fell 2 percent for the quarter.

Landry's, based in Houston, increased its marketing and promotions to draw more customers but that came at the expense of thinner profit margins during the quarter.

The company also had a slew of special items that muddied its bottom line. During the most recent quarter it had a gain from repurchasing a portion of the Golden Nugget debt and gains from insurance proceeds, but it also included a loss on interest rate swaps. In last year's quarter, it reported adjustments for insurance proceeds, lease termination and other issues.

Excluding these items, the quarter was less stellar, with Landry's posting a loss of 9 cents per share, compared with profit of 7 cents per share in same quarter last year.

The company is in the midst of an effort by its chairman and CEO, Tilman Fertitta, to buy the portion of the business he doesn't already own.

Fertitta, who holds a 55 percent stake in the company, has previously tried to acquire the business, offering $14.75 per share late last year. Late last month, Landry's said Fertitta planned to boost his buyout offer to $21 per share to acquire full ownership of the company.

The sweetened offer still must be approved by the restaurant company's board and shareholders.

Shares of Landry's rose 38 cents to $21.76 in afternoon trading.