P.F. Chang's China Bistro F3Q08 (Qtr End 9/28/08) Earnings Call Transcript

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2008-10-22 14:18:10.0

Tags: Call Transcript, Morgan Keegan Co., Earnings, Rate, Taxes, Free Trade, Sales Strategy, Financial Planning, Finance, Sales, Seeking Alpha, Call Transcript, Morgan Keegan Co., Earnings, Rate, Taxes, Free Trade, Sales Strategy, Financial Planning, Finance, Sales, Seeking Alpha, P.F. Chang's China Bistro Inc.

Question-and-Answer Session

Operator

(Operator Instructions) John Glass with Morgan Stanley.

John Glass - Morgan Stanley

Mark, just first of all on the tax rate, if you could just clarify, what is the rate that you used to get to the $0.31 for this quarter?

Mark D. Mumford

$0.25 would be the rate that we are using from continued operations. You know, the biggest drive of the negative tax rate that you are seeing for this quarter and the 21% you are seeing year-to-date is going to be the impairment charge. That tax is calculated at the statutory rate of 38%, which significantly drives down our effective tax rate for this quarter and for the year.

We also have some noise in the provision for additional recoveries from the following amended returns, as well as we trued up our rate based on reduced income estimates but for the most part, what you are seeing and noticing is the impact of that impairment charge.

Operator

Your next question comes from Destin Tompkins with Morgan Keegan.

Destin Tompkins - Morgan Keegan

My question is for Bert -- Bert, when you look at the sales initiatives you have rolled out at the bistro over the last year, whether it’s the grill menu, the mini desserts, lunch bowls, and then most recently the advertising, is there anything maybe you would do differently or maybe plan to do differently as you move into 2009?

Robert T. Vivian

Well, if I could wiggle my nose, I would like for more people to come to our restaurants. I think strategically what we’ve tried to do is offer those guests that do come to our restaurant an opportunity to either have a robust meal at P.F. Chang's from a price standpoint or if they are concerned about the money in their jeans, they can come in and have a great meal with great service and a great ambience and frankly not pay a lot of money. So that’s been the overriding strategy, if you will. The lunch bowls have certainly had an impact on our lunch business. Since their introduction, they have been a nice mix for us at lunch. I think the grill menu has been very successful, certainly at the dinner day part.

You know, it’s tough to say this in light of our current year performance. You know, whenever you have negative comps, it’s tough to speak too positively about all of your initiatives. But at the end of the day, I think we are well-positioned right now as we move into 2009 -- you know, I mentioned in my comments that we are going to add a couple of things to the menu in January, early February. I think again a couple of good additions will again continue on that same theme of offering people both a slightly higher price point and a slightly lower price point in order to make sure that we are covering all of our bases.

 

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