News You Can Chew On

It's been a busy week for restaurant stocks, so I hope you're hungry. Let's dig into a few of the more appetizing earnings reports and headlines.

1. Domo arigato for nothing
Teppanyaki specialist Benihana (Nasdaq: BNHNA  ) isn't moving as quickly as some of its lightning-fast, knife-wielding chefs do. The company posted a 4.5% gain in fiscal second-quarter sales, but you can thank expansion for the uptick. Sales at the individual restaurant level took a 6.5% hit during the quarter. Earnings came in at $0.11 a share, well shy of the $0.15 it generated a year ago.

As a result of the negative momentum and weakening economy, Benihana is talking down its near-term targets. The company will be postponing some of its planned openings, and it now expects to score a profit of $0.40 to $0.45 a share for the entire fiscal year. Hey, at least it's a profit. Who am I to argue with folks who can dissect a sizzling shrimp on a hibachi grill in the blink of an eye?

2. Less salt in its wounds
Responding to growing concerns about what parents are feeding their children, Burger King (NYSE: BKC  ) is reducing the sodium levels of its advertised kids' meals. The move is part of the "BK Positive Steps" initiative, which has nothing to do with someone walking into a Burger King unit in the first place.

3. C'mon, Dave, give me a break
Even home cooking is calling in sick. Famous Dave's of America (Nasdaq: DAVE  ) is closing its three stores in Atlanta. The Minneapolis-based barbecue chain wasn't turning a profit in the home of the Braves. Now Famous Dave's has 47 company-owned locations and another 123 franchised eateries.

4. Thumbs up for pizza delivery
Couch potatoes have one less reason to get up, now that TiVo (Nasdaq: TIVO  ) has teamed up with Domino's Pizza (NYSE: DPZ  ) to offer onscreen pizza ordering.

Pepperoni fans can now just use their TiVo remotes to place an order. Have we really gotten that lazy, America? Now watch someone complain that TiVo isn't nailing the final mile because the pizza must still be delivered, instead of emerging hot and tasty from the DVR box itself.

5. Jamba gets juiced
Get your act together, Jamba Juice! The smoothie chain's parent company, Jamba (Nasdaq: JMBA  ) , posted horrendous quarterly results this week. Comps fell by a whopping 10.3%. Jamba posted a loss of $0.23 a share, or $0.11 before a series of one-time charges.

This stings like a squeezed orange in the eye, because this is supposed to be the company's strongest quarter. Smoothies are a seasonal business, with Jamba typically posting its best numbers during the quarter that falls during the summer, when Californians are looking to cool down with a refreshing smoothie.

6. Jack is out of the box
Not all burger chains are hopping like BK and the Golden Arches. Jack in the Box (NYSE: JBX  ) shares hit a multiyear low yesterday, still reeling from this week's disappointing quarterly report.

The company posted essentially flat net earnings in its fiscal fourth quarter, then spooked investors by forecasting a dip in year-over-year profitability during the current quarter. With comps coming in flat at its namesake fast-food chain, and slightly lower at its quick-service Qdoba concept, investors are finding better performance in the larger burger-flippers.

Check out this week's dessert specials:

Jack in the Box and Famous Dave's are Motley Fool Hidden Gems Pay Dirt picks. Jack in the Box is a Motley Fool Inside Value recommendation. 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, save for Jamba. He 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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  • Report this Comment On November 21, 2008, at 5:50 PM, mskerr58 wrote:

    Why pick on Benihanna? Yes they lowered guidance for the full year down to $0.40 to $0.45 cents, but the stock is ONLY $1.75! This is a company that is consistently profitable in a unique dining niche.

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