Boring Sit-Down Restaurants Suddenly Look Lively
NEW YORK (TheStreet) -- Fast casual restaurants Chipotle
However sales data from the second quarter for the publicly traded full-service restaurants suggests they may not be dead after all.
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According to Bloomberg's Knapp-Track, full-service casual dining comparable sales may fall 1.1% in July, which would reverse the prior month's departure from fourth months of sequential improvement. Comparable sales growth is still negative as a result of traffic declines.
Mirroring this weak fundamental performance, the Bloomberg North American Restaurant Index's total return has amounted to a mere 1% year to date vs. the S&P 500's total return of 5.7%. Per Bloomberg, the index dropped below that of the S&P 500 in April amid worse-than-expected first-quarter financial figures borne from extreme weather conditions.
The attention by the market remains on the full-service restaurant industry's years of market share loss, with little credit being given those companies implementing successful menu price increases, streamlined menus that enhance operating efficiency, low-calorie items that favor the move to healthier lifestyles and remodels that improve guest experience. Underscoring the market's lack of appetite in the full-service casual dining sector, shares of Darden have shed 13% year to date, while shares of Brinker International have underperformed the S&P 500 with a 0.22% year to date rise.
In its fiscal fourth quarter, Brinker International had gains in same-restaurant sales in all three months of the period at both its Chili's and Maggiano's brands. Citing menu price increases, Chili's and Maggiano's logged same-restaurant gains of 2.5% and 0.9%, respectively, in the quarter, outpacing the comparable sales results supplied by the aforementioned Knapp-Track.
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The losers from the second quarter: quick-service operators McDonald's
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