Casual Dining Sales Remain Soft

Casual-dining companies this week continued to highlight cost-saving initiatives that drove profits even as sales remained soft, leading observers to believe a much-hoped-for sales recovery is not in the cards this year.

California Pizza Kitchen Inc. increased its estimated third-quarter earnings projection, and Ruby Tuesday Inc. posted a better-than-expected bottom line result for its latest September-ended quarter. Last week, Darden Restaurants Inc. also reported improved profit.

All three, however, reported negative same-store sales and revenue tallies. Industry observers said a recovery in casual dining is not likely to occur through 2010. Without sales improvements, many casual-dining operations will have trouble continuing to leverage cost-cutting strategies.

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