Should investors be hankering for Applebee's
It does, of course, sound like a bit of an improvement over last month. If you recall, Fool contributor Marko Djuranovic recently discussed Applebee's third-quarter earnings, which included a little ratcheting down of fourth-quarter earnings expectations. Meanwhile, company-owned, same-store sales were also slow in September and October.
On that note, systemwide sales at Applebee's for November were up 4.1% (which includes franchise restaurants), while company-owned (non-franchise) stores' sales remained a bit sluggish, up 1.9%. Guest traffic in that segment increased a mere zero to 0.5%, with a higher average check making the difference.
For now, Applebee's seems to be stuck in a lackluster phase, despite the appetite many consumers seem to have for quick-and-cheap McDonald's
However, Applebee's malaise seems to have extended to other rivals, such as Ruby Tuesday
Applebee's is currently trading at a forward P/E of 20, which seems pricey under the circumstances. Given the uncertainty surrounding guest traffic and same-store sales, for the time being, it seems like a better time to watch the industry carefully than to gobble up shares.
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Alyce Lomax does not own shares of any of the companies mentioned.