The entire market has been rallying through earnings season, but some stocks have been faring a lot better than others. Several restaurant stocks soared last week, fueled by encouraging financial results.
Let's take a closer look at four publicly traded casual dining establishments that saw their stocks post double-digit gains last week.
Red Robin Gourmet Burgers (RRGB 2.92%) -- Up 24% last week
Things are heating up at Red Robin. The eatery that serves up gourmet burgers and thick steak-cut fries in a casual dining setting soared after posting blowout quarterly revenue. Red Robin's top line wasn't anything to write home about; systemwide sales grew by a little more than 5%, helped by a 0.9% uptick in comparable-restaurant sales. However, Red Robin's profit of $0.50 a share was well ahead of the $0.34 a share it earned a year earlier and the $0.36 a share that analysts were modeling.
Red Robin may seem like an unlikely winner. Gourmet burger joints are popping up everywhere, and the new outfits are embracing the fast casual model where folks order and pay at a counter. It's faster. It's cheaper, too, when you consider the lack of tipping. However, Red Robin is giving fast casual a shot with the Burger Works concept that it's starting to roll out.
Bloomin' Brands (BLMN 1.69%) -- Up 15% last week
The parent company of Outback Steakhouse and Carrabba's Italian Grill also moved higher. Bloomin' Brands saw its revenue climb 10% to $1.1 billion. Comps climbed 3.3% across its concepts, but that was largely the result of even stronger gains at Outback, Fleming's, and Bonefish Grill offsetting a 1.2% slide at Carrabba's.
Adjusted earnings clocked in with flat growth at $0.10 a share, but that was actually ahead of the $0.08 a share that Wall Street pros were forecasting. It's the first time in three quarters that Outback didn't disappoint on the bottom line.
Things aren't perfect. It's closing down its nearly three dozen Outback eateries in South Korea. Adjusted earnings also failed to keep up with sales despite improving restaurant-level operating margins. It was still an overall win in the market's eyes, however.
Potbelly (PBPB +0.00%) -- Up 11% last week
One of last year's wildest crash and burn IPOs is starting to show new signs of life. The sandwich maker that got its start as an antique store saw its quarterly sales climb 9% to $84.7 million, assisted by a 0.5% increase in comps and brisk expansion. Adjusted earnings declined from $3.2 million a year earlier to $2.8 million this time around.
These may not seem like very impressive metrics, but it's actually Potbelly's first quarter of positive comps this year. Potbelly's adjusted profit of $0.09 a share also exceeded expectations.
Potbelly has had a wild run as a public company. It went public at $14 last year, more than doubling to close above $30 on its first day of trading. It's been mostly downhill since then, bottoming out below $11 this summer, but last week's move pushes it back above its original IPO price.
Texas Roadhouse (TXRH 0.60%) -- Up 10% last week
The last of the stand-alone publicly traded casual steakhouses rose after serving up its latest report. Revenue climbed 15% for the chain of 436 roadhouse-themed restaurants, helped by a 5.9% spike in comparable-restaurant sales. Earnings climbed 10% to $18.9 million, or $0.27 a share.
The bad news here is that Texas Roadhouse's profit fell short of analyst estimates. This isn't new. It has happened in three of the past four quarters. However, the market was ultimately encouraged by the top-line beat on healthy comps. It also only helps that items holding the bottom line back -- commodity inflation, a spike in general liability insurance, and a higher tax rate -- are temporary developments.
With comps trending higher throughout the month and clocking in close to 7% for the month of October to kick in the new quarter, Texas Roadhouse lassoed up a big week.
Casual dining isn't dead. Investors just need to know where to set the table.
