Showing us how it rolls, Rubio's Fresh Mexican Grill
Yes, Rubio's is getting itself a bargain. On the flipside, one has to wonder why a franchisee would unload the concept stores so quickly. Rubio's has been busy trying to win back investor confidence with gradual expansion and concept tweaks, but the results haven't delivered the goods lately.
The chain is coming off a questionable quarter. Earnings were halved as revenue climbed all of 3.9% for the March quarter. Comps rose 0.9% for the period, but that was the result of price hikes as traffic was actually down by 2.1%. Tack on the 1% decline in comps a year earlier and you have a company that isn't performing any better at the store level than it was two years ago.
It's only logical to compare that to Chipotle Mexican Grill
This doesn't mean that Rubio's is a failure, only mortal. Chipotle's rivals like Baja Fresh at Wendy's
Rubio's isn't really in that camp as its reach is only one-third of the size of the larger players. Its 150 units stretch across only the five Southwestern states and its expansion strategy calls for adding no more than a dozen new locations this year.
However, it joins Chipotle and casual dining operator Mexican Restaurants
That wouldn't be too bad, and it would certainly make Rubio's gamble in Vegas pay off nicely.
Longtime Fool contributor Rick Munarriz could go for a burrito about now. He does not own shares in any of the companies in this story. T he Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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