Trends Improving for Casual Dining in March

Indie Research

After traffic slowed in February, consumers have returned to dining out in March. BullMarket.com recently looked at a number of casual dining stocks set to benefit from this trend, including Cheesecake Factory (CAKE), Buffalo Wild Wings (BWLD), Darden Restaurants (DRI), DineEquity (DIN), and BJ's Restaurants (BJRI).

He is a small sample of what BullMarket.com wrote about Buffalo Wild Wings :

Buffalo Wild Wings has been one of the fastest-growing full-service restaurant chains around. While it operates in a crowded space with a bevy of competitors, we like the ongoing expansion beyond its Rust Belt core and its simple strategy of selling "wings, beer and sports." The next couple of weeks of "March Madness" will give it plenty of opportunity to promote itself and drive traffic.

Separately, wing prices have started to fall, which has helped to lift the stock. Sterne Agee, in a reported released March 7th, said data from the American Restaurant Association revealed prices for jumbo cut wings fell from an all-time high of $2.12 per pound in January to $1.59 per pound at the end of February, a drop of roughly -25%. Obviously that kind of price drop should cut COGS and boost restaurant margins, which could result in a better-than-expected quarter.

We like the concept of moving to per-pound pricing, but it could be a tricky transition if customers perceive the change as less for more. Thus, we appreciate the fact management is taking its time understand how customers might react to the change rather than rushing into it.

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