In an early indication of how the recent wave of dining-room limits has affected casual restaurants, J. Alexander’s reported the capacity cutbacks have cost its brands 20 to 30 percentage points in same-store sales.
The company said on Tuesday that weekly per-unit sales for the J. Alexander’s, Redlands Grill and Stoney River Steakhouse and Grill chains have been running between 60% to 70% of year-ago levels during the last four weeks, after climbing to 90% of the 2019 watermark in September and October.
As of Monday, 10 of the company’s 46 polished-casual restaurants had suspended dine-in service as directed by state or local officials because of a spike in new COVID-19 cases. Management said the brands are trying to offset the limitation by expanding their outdoor seating where that form of service is still permitted while maintaining a “robust” carryout business at all 46 restaurants. It pegged off-premise sales at $700,000 to $800,000 per week.
The company also indicated that it is repaying $10 million in debt. The combination of repaying the borrowed funds and dealing with capacity limits have undercut J.Alexander’s earlier estimates that it was burning cash at the rate of $265,000 to $315,000 per week, management said. Without the loan retirements, the company would be generating a cash flow of $400,000 to $450,000 per week during the current quarter.
“However, the company continues to believe that, at current business levels, it will have adequate liquidity for the balance of fiscal 2020 and fiscal 2021 from cash on hand and available borrowings,” the company said. It did not give a reason for repaying debt at this time.
“We continue to navigate the ever-changing landscape in which we operate, and we are working hard to ensure that we have explored every alternative and opportunity available to us,” J.Alexander’s CEO Mark Parkey said in a statement.
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