There always seems to be restaurant news on the menu. Let's take a look at some of this week's more appetizing stories.
The wings are there so you can fly
Shares of Buffalo Wild Wings (Nasdaq: BWLD) traded as much as 4% higher this morning, after KeyBanc Capital Markets analyst Lynne Collier issued a favorable note on the company.
Collier feels that the company is bucking the trends of negative comps and eroding margins that have become contagious outside of the fast food space. The company has healthy momentum heading into the lively football season, where chicken wings move as quickly as Devin Hester on a punt return.
Et tu, sushi?
Teppanyaki master Benihana (Nasdaq: BNHNA) posted fiscal first quarter results on Wednesday. Revenue inched 5% higher to $94.5 million, but that was the result of concept expansion. Comps actually fell by 4.9% during the period, with weakness at all three of its chains (Benihana, RA Sushi, and Haru).
Those crafty Benihana tableside chefs can turn onions into simmering volcanoes and toss shrimp tails into their pockets, but they can't make profits grow if patrons aren't coming. Margins were squeezed during the quarter, with earnings of $0.12 a share coming in well below last year's $0.25 a share showing.
Lobsters aren't the only ones seeing red
As a casual dining bellwether, Darden Restaurants (NYSE: DRI) is typically a fair proxy for the industry, with more than 1,700 locations. Its peers better hope it's not a proxy this time. The parent company of Olive Garden, Red Lobster, and LongHorn Steakhouse shocked investors this week when it talked down its current quarter and lowered its guidance for all of fiscal 2009.
Same-store sales fell at all of its key concepts except Olive Garden. With Darden now expecting to earn an adjusted $0.60 a share to $0.62 a share for its latest quarter, far shy of the $0.75 a share that Wall Street anticipated, investors may not warm up to the casual dining space as a turnaround investment. Until Darden hits bottom -- unlike its bottomless soup, salad, and breadstick lunch specials at Olive Garden -- investors will want to tread cautiously here.
Biscuits? You've got to know when to fold 'em
The new Kenny Rogers CD is out, with a twist. The country legend's Kenny Rogers: 50 Years is being sold exclusively through CBRL Group's (Nasdaq: CBRL) Cracker Barrel restaurants. More than just a compilation, the CD also includes three new songs.
The move may not be as bold as some the music distribution deals you see at Starbucks (Nasdaq: SBUX), but it's a good fit, given CBRL's country-cooking vibe and Southern hospitality.
Got smoothie?
Shares of Jamba Juice parent Jamba (Nasdaq: JMBA) traded as much as 33% higher this morning, after the smoothie-blending chain posted its second quarter results.
No, the showing wasn't as smooth as the company's Orange Dream Machine. Comps fell by a sharp 7.3% at its company-owned stores, and Jamba ultimately posted a chunky charge-laden loss for the period.
However, investor optimism is poking its head out, given a recent shakeup at the top, along with last night's encouraging news that its "ready to drink" retail distribution deal with Nestle (OTC BB: NSRGY.PK) is doing so well that Nestle broke out televised ads in select markets this summer.
Jamba is clearly threatened by Starbucks' and fast-food chains' recent moves into the smoothie realm, but have you tried those Starbucks Vivanno smoothies? Maybe I just caught the Orange Mango Banana Vivanno at a bad time this week, but it's definitely not up to snuff with the kind of treats that Jamba Juice and Smoothie King are serving.
Check out this week's dessert specials:
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