P.F. Chang's Shares Plunged: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of P.F. Chang's (NAS: PFCB) fell 13% in trading as investors threw their chop sticks down in disgust after the company released earnings.

So what: Revenue fell 1% to $311 million, but it was same-store sales falling 2.5% at P.F. Chang's restaurants and 2.7% at Pei Wei Diners that has investors concerned. Earnings per share fell to $0.40 from $0.55 a year ago, which is the same result analysts expected this quarter.

Now what: Same-store sales drive earnings, and even a small change can point to issues at a chain. This deterioration in sales has caused management to reduce earnings expectations from $2.15 to $2.20 per share down to $1.60 and $1.70 per share for the full year. I'm not seeing a big reason to buy today and would search for growing same store-sales like Chipotle (NYS: CMG) if you're looking for a restaurant stock.

Interested in more info on P.F. Chang's? Add it to your watchlist.

At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.The Motley Fool owns shares of Chipotle Mexican Grill. Motley Fool newsletter services have recommended buying shares of Chipotle Mexican Grill, as well as creating a iron condor position in Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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