For Immediate Release
Chicago, IL – June 6, 2013 – Today, Zacks Equity Research discusses the U.S. Restaurants, including Burger King (BKW), Krispy Kreme Doughnuts Inc. (KKD), Domino Pizza Inc. (DPZ) and Texas Roadhouse (TXRH).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at
Not all companies performed equally well in the quarter. While some were laggards, others posted solid results mostly on their individual strength. Thanks to favorable weather last year, many restaurateurs faced tough comparisons in the first quarter and failed to exceed the year-ago quarter's solid comparable sales numbers. Most of the chains posted weaker-than-expected revenue numbers, but, on a bullish note, managed to score on earnings owing to cost savings and policies such as share repurchase. Operators blamed a softer economic trend for the insignificant growth in revenues.
Industry behemoth McDonald’s delivered weaker-than-expected results in the first quarter on both counts, while another renowned operator, Yum! Brands, registered weak sales owing to the recent ordeals in its China business. However, we believe both companies will rebound over the longer term, once global issues subside.
Some other notable companies like Brinker beat earnings but missed revenues. Burger King's (BKW) earnings were in-line but revenues outperformed. Krispy Kreme Doughnuts Inc. (KKD), Domino’s Pizza Inc. (DPZ) and Texas Roadhouse (TXRH) beat both revenues and earnings. Same-store sales growth at Krispy Kreme, Domino’s, Jamba, AFC Enterprises and Panera deserves a mention.
According to the National Restaurant Association, the restaurant industry is projected to expand in 2013 on the back of U.S. recovery, albeit at a slow pace. Like 2012, focus on cost containment, extra value-for-price and international expansion will be on most restaurateurs' wish-list to tide over the some macro difficulties this year.
According to the National Restaurant Association, as much as 41% of restaurant operators expect to see an uptick in sales in the coming six months on an improving economy. Restaurant operators' capital spending plans are also riding uphill, reaffirming their positive outlook. We are optimistic of bottom-line expansion in the near term.
The National Restaurant Association estimates a 3.8% year over year increase in total restaurant sales to $660.5 billion in 2013. However, inflation-adjusted sales suggest only 0.8% growth. If realized, this would mark the third straight year of above $600 billion total industry sales. The limited-service eating-place segment will likely grow faster than the full-service restaurant segment.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4581.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com
- Consumer Discretionary
- Texas Roadhouse
- Burger King
- Krispy Kreme
- Zacks Investment Research