Restaurant Stock Performance for the week ending August 7, 2009

Restaurant Stock Performance for the week ending August 7, 2009

By Eric Hertha
(August 8, 2009 – Hospitality Business News) For the week ending August 7 our list of restaurant stocks increased by 0.9%, bringing the year to date change to 67.3%. The top 10 stocks for the week increased in value by an average of 11.6% led buy a 33% increase in Morton’s.

During the week Morton’s announced quarterly earnings of $0.04 per share vs. the Analysts estimate of $0.03. Prior to this increase Morton’s had been up 36.2% for the year. This compares to an increase of 161.6%, year to date, at Ruth’s Chris. For the week Ruth’s was down by 7.9% on signs that July sales are still weak and comments by Analysts.

Caribou Coffee Company, which has 522 stores, posted earnings per share of $0.06 vs. the Analysts estimate of $0.00. The stock increased by 19.1% for the week and is up 408.8% for the year. Continuing with coffee, the number 4 stock for the week, Tim Horton’s, increased by 9.1% due to a good performance in the second quarter. Sales increased by 5% (constant dollars) while EPS rose by 5.6%. and Starbucks added 7.5% based on good earnings and recent news.

Number 3 for the week with a 14.8% increase was Wendys/Arbys Group. Up until this week the stock had been down on a year to date basis but the earnings for the second quarter sparked some interest. Wendy’s same store sales were flat but margins improved. While at Arbys the decline seems to have slowed somewhat from the first quarter.

On the other end of the list the bottom 10 stocks decreased by 8.7% for the week led by Good Times Restaurants with a decline of 12.5%.Other than the March 31 results, which were not encouraging, I have not seen any other news stories.

Number nine was O’Charley’s with a decrease of 11.9% for the week The company reported their second quarter results and same-store sales for the second quarter of 2009 declined 6.9 percent at O'Charley's company-operated restaurants, 10.0 percent at Ninety Nine Restaurants, and 20.4 percent at Stoney River Legendary Steaks. Add to this that operating margins increased from 15% to 16.4%.

Number 8 was Brinkers with a decline of 11.2% for the week. There earnings were released during the week. An excerpt states
Brinker reported revenues for the 13-week period of $829.4 million, a decrease of 22.7 percent compared with $1,073.6 million reported for the same period of fiscal 2008. The company experienced a 9.0 percent decrease in comparable restaurant sales (see Table 1) in the fourth quarter of fiscal 2009 due to decreases across all brands. Revenues were also negatively impacted by a net decline in capacity of 18.2 percent due to 55 restaurant closures (five of which were Macaroni Grills) and the sale of 198 restaurants since the fourth quarter of fiscal 2008 (189 of which were Macaroni Grills).

In summary it’s the old story: Companies that are beating estimates are doing well while the ones that fall behind are being rewarded with lower stock prices.
To see the entire list click here