International and Domestic Unit Growth Boost Restaurant Industry in the Longer Term: Scott M. Swanson, Partner and Senior Equity Analyst at Crowell, Weedon & Co., Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - March 20, 2013 - The Wall Street Transcript has just published its Restaurants, Food and Drinks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Shift Toward Healthier Food Options - Emerging Market Expansion - Focus on Brand Equity - Store Sales Growth Trends - Cautious Consumer Spending

Companies include: The Cheesecake Factory Incorpo (CAKE), BJ's Restaurants Inc. (BJRI) and many more.

In the following excerpt from the Restaurants, Food and Drinks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What other trends are you seeing in the industry? What's resonating with consumers these days?

Mr. Swanson: Right now the consumer certainly has some pretty well-documented challenges from an economic standpoint, and so the industry overall is pretty promotional. BJ's has talked about their need to be a bit more promotional this year, and promotional can mean either stepped-up marketing and/or discounting, or what have you.

BJ's, for instance, noted that their midweek business is not very strong right now, but occasion and weekend business is pretty good. So for instance, Valentine's Day was good, sporting events do well - those kinds of things that will prompt the consumer to go out and enjoy a meal out. But let's face it, restaurant spending is discretionary, and the consumer right now is a bit more cautious on it.

We're seeing the industry respond a little bit. The plus side for the industry now, relative to a couple of years ago, is commodity costs, food costs, etc., are pretty well controlled right now, growing at a 2% to 3% range. The nice thing about companies like Cheesecake Factory in particular is they seem to have the ability to continue taking menu prices up on a comparable level to what they're seeing in their cost. That's from a broad level what we're seeing out there; it's a challenge to grow same-store sales right now across the industry.

TWST: Did anything else from the most recent earnings results and calls stick out for you?

Mr. Swanson: I think the important thing...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

View Comments (0)