It was the best of times for Smith & Wollensky (Nasdaq: SWRG). It was the worst of times for Papa John's (Nasdaq: PZZA). It was the summer of our carb discontent.
May's comps for these two polar opposites bear out that the South Beach and Atkins dieting trends, both of which have folks counting net carbohydrates, show no sign of cresting.
Pizza guy Papa John's posted a 3.4% slide in same-unit sales last month. Upscale steakhouse Smith & Wollensky, meanwhile, saw its own comps soar by a stunning 14.8%. The message is clear. There's no love for the doughboy these days, but the inner carnivore is letting it all hang out.
In fact, Smith & Wollensky was already on a roll. The 17-unit chain produced an 8.8% uptick in comps for the March quarter, followed by a 9.9% spike in April. Papa John's has been heading the other way, with sales at the store level falling by 3.7% in March and 5% in April.
To be fair, these trends aren't exactly flavors of the month. Smith & Wollensky's streak of favorable monthly sales comparisons dates back over two years, while Papa John's had been in a funk for quite some time before value hunters started bidding up the shares a few months ago.
Come to think of it, this may not be the best time for Domino's to go public. For the steakhouses, however, even higher beef prices can't knock the shine off the specialty-dining niche. RARE Hospitality (Nasdaq: RARE), Outback Steakhouse (NYSE: OSI), and Lone Star Steakhouse (Nasdaq: STAR) may vary when it comes to the quality of their earnings, but growing comps in the industry can't be ignored.
The fact is, no matter how well a concept is run, it can't survive the shuttering fate of dwindling traffic. While the opposite isn't entirely true -- a company like Smith & Wollensky has yet to prove that it can be consistently profitable -- a spike in patrons is certainly what you want if you're looking to justify a concept's viability.
Are you ready to give the low-carb diets a shot? How does one start to embrace the Atkins-approved way of dining? All this and more -- in the Low Carb Way of Life discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz always loved lunch in grade school -- he even liked the look of hairnets. However, he does not own shares in any of the companies mentioned in this story.
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