American steakhouses are pointing their fingers at sterling.
On Friday, Del Frisco’s Restaurant Group, a Texas-based operator of steakhouses across America, attributed some of the weakness in its third-quarter earnings to the collapse of the British currency.
“Sales choppiness during our seasonally weak third quarter yielded results that fell short of our expectations and have caused us to revise our annual guidance,” the company said in the statement.
“In addition to continued weakness at our locations most impacted by the continued downturn in the energy sector, we saw weakness at several East Coast locations from reduced tourism spending, specifically from the fallout over the British pound devaluation.”
The pound has had a rough couple of months, ever since Britons’ so-called Brexit vote in June to leave the European Union.
The currency plunged by as much as 11% to a 30-year-low on the morning after the vote, and it sort of floated around that level over the summer.
Then sterling started tumbling again in early October following:
Comments from British Prime Minister Theresa May on Sunday indicating that Article 50 would be triggered by the end of March 2017, which would begin the official two-year process of Britain leaving the European Union; And statements from UK and EU officials suggesting that Britain was heading for a “hard Brexit,” or an exit from the EU with terms unfavorable for the UK.
For the third quarter, Del Frisco’s Restaurant Group missed on both the top and the bottom lines. Earnings came in at $0.04, compared with expectations of $0.05, while revenue of $71.4 million missed the $72.7 million that was expected.
Del Frisco’s had noted during a previous earnings call that sales at individual restaurants with exposure to the energy sector declined.
The pound was down by 0.3% at 1.2218 against the dollar as of 9:21 a.m. ET after dipping below $1.22 earlier in the day.