Boston Chicken Posts Big Quarterly Loss

Boston Chicken Inc. reported a much larger-than-expected loss for the first quarter and the once high-flying restaurant chain said it may have trouble paying its debts. Boston Chicken, parent of Boston Market, with more than 1,150 restaurants in 38 states, said it lost $313 million, or $4.38 a share, on sales of $212 million. Analysts had expected a loss of 61 cents a share. The chain had net income of $21 million, or 31 cents a diluted share, on sales of $117 million, a year ago. Chief Executive J. Michael Jenkins, who was appointed May 1, said the Golden, Colo.-based company had no plans to seek bankruptcy protection. The results included a $202-million allowance for possible losses of loans to franchisees and a $58-million charge for losses incurred by franchise affiliates. Sales including franchise outlets not owned by the company fell 16% to $322 million. Jenkins said the firm has identified a “handful” of stores for closing and has targeted $15 million to $20 million in overhead costs it can cut. Boston Chicken shares, which traded as high as $41 in late 1996, tumbled on the news by $1.23 to close at $3.02 on Nasdaq.