The stock price fell 31 cents to $5.55 per share on the Nasdaq as of early this afternoon.
Excluding the interest expense, the loss of 3 cents per share was close to the average analyst expectation of a 5 cent loss in the quarter, according to Thomson Reuters.
Company executives are hoping for a turnaround from recent changes to the menu and a new CEO David W. Head, who starts his new job Sept. 1. Head comes from Captain Ds Seafood Kitchen in Nashville, where he was chairman, president and CEO.
Analyst Bryan Elliott of Raymond James & Associates said Head has experience sustaining a struggling chain but will have issues to face at OCharleys.
The continuing high single digit (same-store sales) declines at the core O'Charley's brand are disappointing and troubling, he wrote in a note to investors.
Same-store sales at OCharleys company owned stores fell by 7.9 percent in the quarter, both on fewer guests and lower average checks.
Same-store sales at the companys other restaurants also fell, but by lesser amounts, as more diners were offset by lower average checks. Revenues fell 5.9 percent overall in the second quarter to $194.1 million.
The company has been suffering from a weak economy and an oversaturated dining market for casual, sit-down chains, analysts have said.
While we were disappointed with the second quarter financial performance of the OCharleys concept, we believe that enhanced focus on innovative food offerings, service improvements and value will lead to a shift in sales trends later this year, interim CEO Philip Hickey, Jr. said in a statement. I look forward to working closely with David to continue our pursuit of positive momentum.
OCharleys introduced recently a 2 entrees for $14.99 deal available every day, all day.
Ninety Nine Restaurants has been advertising nine entrees for $9.99 each in a play off the restaurants name. For the third quarter, OCharleys, Inc. is forecasting revenue of between $186 million and $192 million, and a loss from operations of between $1 million and $4 million.
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