There always seems to be restaurant news on the menu. Let's take a look at some of this week's more appetizing stories.
1. Ask Carl: He knows everything
Leading fast-food chains continue to thrive in this tricky environment. Shares of CKE Restaurants (NYSE: CKR ) rose 6% Thursday after the company delivered better than expected second-quarter results.
Earnings from continuing operations clocked in at $0.23 a share, well above both the $0.18 a share it earned a year earlier and the $0.20 a share that Wall Street analysts were projecting. An aggressive share repurchase helped pad results, but the analysts knew that before they made their guesstimates.
Revenue dropped slightly as a result of the company's refranchising efforts: It's selling company-owned Hardee's and Carl's Jr. units to franchisees. It's a win-win for both, especially because same-store sales at each of the chains rose by more than 3% during the quarter.
2. If you see the chair a-rocking, you may as well come knocking
Shares of CBRL Group (Nasdaq: CBRL ) were rocking like the front porch chairs at its Cracker Barrel Old Country Stores on a Sunday afternoon, after the company provided an upbeat outlook. CBRL overcame a lackluster quarterly report by initiating its 2009 profit guidance at $2.80 to $3.00 a share. The performance is based on positive comps at both its restaurants and attached country stores.
I guess CBRL is willing to put its money where its projected mouth is, too. Two days after the report, CBRL announced that it was hiking its quarterly dividend by 11%.
3. Breadsticks for everyone
Earnings also took a hit at casual dining bellwether Darden Restaurants (NYSE: DRI ) during its fiscal first quarter. The upside here is that it kept one of the industry's most envious streaks going, as domestic Olive Garden locations posted their 56th consecutive quarter of same-store sales growth. The same can't be said for the company's other concepts, like Red Lobster and LongHorn, whose unit-level production dropped during the quarter.
Thankfully, Darden expects growth for all of its fiscal year. It is encouraging, especially because the casual dining sector clearly hasn't held up as well as its value-minded quick-service peers.
4. Game on, Yum!
Who knew that Yum! Brands (NYSE: YUM ) was such an avid gamer. Two of the company's key concepts are teaming up with hot video game franchises for promotional campaigns. KFC is rolling with Activision Blizzard (Nasdaq: ATVI ) in marketing next month's Guitar Hero: World Tour, offering prize giveaways and collectible soft drink cups. Pizza Hut is joining with Take-Two Interactive's (Nasdaq: TTWO ) Rockstar Games to give away a $100,000 customized Saleen Mustang in a marketing ploy to get pizza lovers to warm up to Take-Two's Midnight Club LA racing game.
Is Pizza Hut sure that a pie-delivery chain wants to be associated with a racing game? Will it cover drivers who get speeding tickets? Will it cover customers who get so pumped that they take the delivery driver's car for a joyride? I'm kidding of course, but I'm sure that there's some activist group out there already circulating a petition.
5. The wind beneath KFC's wings
Sometimes no news is good news. Panera Bread (Nasdaq: PNRA ) kicked off a week of share-price gains on Monday, reiterating its third-quarter profit guidance. Panera still expects to post earnings of $0.42 to $0.44 a share.
With other market darlings talking down their prospects last week, Panera stepping up to say nothing says everything. Well done, Panera. Now put my fave Chicken Tomesto sandwich back on the menu of my local Panera!
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