Why Ignite Restaurant Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ignite Restaurant Group (NASDAQ: IRG  ) were self-destructing today, finishing down 16% after its third-quarter earnings came in off the mark.

So what: The parent company of Joe's Crab Shack and other restaurant chains posted an adjusted loss of $0.04 per share, below expectations of a $0.21 profit, and its revenue of $227.6 million missed estimates as well. Same-store sales grew 3.3% at Joe's Crab Shack and 4% at Brick House Tavern, but fell 2.7% at the recently acquired Macaroni Grill. CEO Ray Blanchette said he was "pleased with top-line momentum at the two legacy brands," and said that Ignite had made "tangible progress" in turning around Macaroni Grill.

Now what: Ignite has missed analyst estimates in each of the last four quarters as analysts seem to have underestimated the challenge of integrating the new acquisition. A year ago, before the acquisition, Ignite delivered EPS of $0.35 in the usually strong summer quarter. Shares of the restaurant group have now fallen 40% from their peak this summer, and it's hard to see them bouncing back without considerable progress on Macaroni Grill. Factor in the general headwinds in the casual dining segment and this seems like an easy pass.

Add some pop to your portfolio
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the world's No. 1 growth-stock newsletter, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, with you! It's a special 100% free report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click here for instant access to a whole new game plan of stock picks to help power your portfolio.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2716198, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:07:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:00 PM
IRG $0.81 Down -0.01 -1.59%
Ignite Restaurant… CAPS Rating: *****