There always seems to be restaurant news on the menu. As I do every Friday, let's take a look at some of this week's more appetizing stories.
1. Making dough at Panera
What do legendary rock band Pantera and Panera Bread (Nasdaq: PNRA ) have in common? Well, I guess one could say that they both used to rock harder. Panera posted its latest quarterly report this week, and the sandwich maker is no longer the speedmetal shredder it was in its earlier days.
This doesn't mean that Panera is toast. Revenue and earnings grew at respectable 15% clips. Comps rose during the period, even if that resulted from the company passing on higher food costs to its gourmet-panini munchers in the form of higher menu prices. And in a refreshing change, operating margins actually improved during the period.
Panera shares may be trading at a premium to its quick-service competition, but as long as it's able to keep growing in this tricky environment, the markup will be worth it.
2. This is how the burrito rollers roll
Remember the days of double-digit comps growth at Chipotle Mexican Grill (NYSE: CMG ) (NYSE: CMG-B ) ? Leave it to this iffy climate to eat away at even the classiest burrito joint in the country.
Comps rose by only 3.1% at the chain this past quarter. Heady expansion over the past year fueled an 18.9% spike in revenue, but collapsing margins triggered a rare dip in year-over-year profitability. Increasing prices is one way to improve margins and accelerate comps, but only if consumers are willing to foot the bill. In these cash-conscious times, that's certainly not a given.
3. Let them eat cheesecake
If Panera and Chipotle investors are recalling the glory days, one can only imagine the mind-set at Cheesecake Factory (Nasdaq: CAKE ) . The casual-dining rock star, which once dazzled the industry with long lines and consistent positive comps, is in a bind. Revenue grew by 8% in its latest quarter, but earnings fell by 36%.
Rising costs and a sharp 4.8% decline in comps helped whack away at margins like a freshly sliced Godiva chocolate cheesecake.
4. BJ's and the bear
Another chain that has seen its streak of positive comps turn negative is BJ's Restaurants (Nasdaq: BJRI ) . The deep-dish pizza specialist is following Cheesecake's lead with higher revenue (up 19%), lower earnings (off by 34%), and a dip in quarterly comps (down 1%).
To be fair, BJ's was bumping up against a robust 5.6% uptick in comps a year ago. Now investors will have to see whether the latest quarter is an anomaly, or whether it marks a new trend in waning concept popularity.
5. Dim sum at P.F. Chang's
Maybe we've got a broken record here. How do you think the results at P.F. Chang's (Nasdaq: PFCB ) turned out? You know how it's going in casual dining, so don't act too surprised to see revenue climb (10%), earnings fall sharply (44%), and comps inch lower (3%).
A few years ago, Cheesecake Factory and P.F. Chang's were the stars of the casual-dining space. Cheesecake Factory was reinventing the possibilities of a high-volume concept. P.F. Chang's was proving that a casual-dining concept specializing in Chinese food could become a national chain.
Times change, and so do wait times for available tables.
6. Big Mac saves the day
Let's end this on a good note by turning to the Golden Arches. McDonald's (NYSE: MCD ) is doing just fine. The popular Dollar Menu and the timely addition of premium items like iced coffee have combined to deliver healthy results.
Earnings from continuing operations rose 27% at Mickey D's during its third quarter. Fueled by a huge 7.1% spike in comps (including a 4.7% gain in North American units, for those who mistakenly feel that international exposure alone is saving the chain), it's hard not to like McDonald's as a panic-proof stock.
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