News You Can Chew On

As I do every Friday, I like to look at some of the week's more appetizing stories in the world of food. There always seems to be restaurant news on the menu.

1. Not so super, Sonic
Fast-food carhop specialist Sonic (Nasdaq: SONC  ) posted quarterly results this morning, and the report wasn't as upbeat as what most burger chains have been reporting. Comps dipped slightly during the quarter, and earnings of $0.33 a share are just shy of the $0.34 it notched a year earlier. However, Sonic did manage to keep its impressive streak of positive comps going -- it's now up to 22 fiscal years.

Sonic is also still growing as a concept, as the Oklahoma City-based chain expands to watch over an empire of more than 3,400 drive-ins. With throwback allure and lower gas prices possibly inspiring folks to pull up to a Sonic order screen, this company should be fine, as long as it's able to successfully exorcise the demons of rising commodity and labor costs that are haunting the entire industry.

2. Jack in the Box no longer gives you gas
Burger-flipping giant Jack in the Box (NYSE: JBX  ) announced plans to unload its Quick Stuff convenience stores. Strategically located adjacent to Jack in the Box restaurants, the 61 stores operate as branded gasoline stations with convenience-store goodies inside.

Jack in the Box won't be unloading its restaurants, though. Now it can focus on growing its namesake fast-food chain and its faster-growing Qdoba Mexican Grill concept. Qdoba has not been as successful as Chipotle Mexican Grill (NYSE: CMG  ) , but it's one of the few quick-service Mexican food outlets that have succeeded, at a time when similar chains, such as Baja Fresh, have stalled.

3. Throwing out the burrito with the bean water
On the same Mexican bent, Rubio's Restaurants (Nasdaq: RUBO  ) provided a sneak peek at its third-quarter performance last night. There's nothing fishy about the fish-taco pioneer. Rubio's expects to top analyst estimates of $0.04 a share for the recently concluded third quarter, as a result of posting a same-store-sales dip of 2.1%.

Yes, even though the comps are negative, this showing is a positive development, an improvement on the 3.3% and 3.9% dips during the first and second quarters, respectively.

4. Let's get cozy with Cosi 
Gourmet-sandwich maker Cosi (Nasdaq: COSI  ) is also holding up well in this dicey environment. The company is still three weeks away from announcing its third-quarter financials, but it did pre-announce its sales for the period.

And they were flat. Systemwide comparable sales clocked in 0.1% lower than a year ago, while total revenue crept just 0.3% higher. Investors will naturally want to find out how this all plays out to the bottom line, but as is the case with any good made-to-order sandwich, they'll have to wait to be fed. The company reports on Nov. 6.

5. Hold those wings
Zacks is upgrading shares of Buffalo Wild Wings (Nasdaq: BWLD  ) with a hold rating. That may not sound like a ringing endorsement. After all, "hold" is the relationship equivalent of "we can still be friends." However, Zacks is sold on the historical growth and viable strategy fueling the rapidly growing chicken-wings chain.

The analyst has a six-month price target of $39 for the stock.

6. Like a tumbling line of dominoes
Domino's Pizza (NYSE: DPZ  ) serves up round square meals, but the pizza chain isn't doing so well. The stock tumbled earlier this week, after the company posted lower-than-expected quarterly results. Comps, revenue, and earnings all fell during the quarter.

That's not good. If profits take a hit on growing sales, investors can overlook the near-term spike in dough and cheese prices, but when comps go along for the dive, shareholders get antsy. Wasn't Domino's supposed to be a big winner as more folks order a pizza, instead of driving out to the neighborhood casual-dining chain?

Check out this week's dessert specials:

Jack in the Box is a Motley Fool Hidden Gems PayDirt pick. Buffalo Wild Wings and Chipotle are Motley Fool Hidden Gems recommendations. Jack in the Box is a Motley Fool Inside Value selection. Chipotle Mexican Grill is a Motley Fool Rule Breakers pick. The Fool owns shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is the rare foodie who embraces restaurant chains. He owns no shares in any of the companies in this story and is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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