When RARE Hospitality
Earnings inched higher, going from $0.42 a share during last year's March quarter to a $0.44 showing this time around as sales rose by 14%. Expansion fueled most of the top-line growth, and that's not necessarily a bad thing, as long as the concepts are hitting on all cylinders.
At RARE's flagship LongHorn eatery, comps rose for the 13th consecutive quarter, though this period's rather meager 1.8% uptick shouldn't lead anyone to believe that this streak will reach DiMaggio proportions. The performance at LongHorn pretty much sets the tone for RARE, since LongHorn accounts for all but 48 of the company's 274 restaurants.
It was feast or famine at RARE's other concepts. The high-end Capital Grille chophouse produced a 5.7% increase in comps, while the company's original casual steakhouse entry, Bugaboo Creek, suffered a 4.5% decline in same-unit sales.
Capital Grille has been a steady winner, though it's hardly a reason to buy into the company, given that it accounts for less than 17% of the firm's total revenue. You would have a purer play in upscale steakhouse Smith & Wollensky
On the casual side, you have plenty of other options. Texas Roadhouse
Or why not RARE itself? It's kind of creepy how RARE, Outback, and Lone Star are all trading between 21 and 22 times earnings right now. RARE is looking to earn between $1.53 and $1.57 a share this year, and that prices the stock at a forward earnings multiple of 19. No, that isn't exactly dirt-cheap, especially when you have companies like Logan's Roadhouse operator CBRL Group
Some other hearty reading:
- Lone Star has proved worthy of its Texas-size appetite lately.
- Texas Roadhouse, on the other hand, has been more of an El Paso.
- Check out some real Rule Breakers at a much earlier stage in their defiance.
Longtime Fool contributor Rick Munarriz does enjoy the casual steakhouses. He owns shares in CBRL Group. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.