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Del Frisco's Grille Forays into Calif.

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Texas-based restaurateur Del Frisco's Restaurant Group Inc. (DFRG) recently unveiled a Del Frisco's Grille unit in California. Apart from California, Del Frisco's Grille operates in New York, Washington DC, Dallas, Atlanta, Phoenix and Houston.

Currently, Del Frisco's Restaurant Group, which owns and operates Del Frisco's Double Eagle Steak House, Sullivan's Steakhouse and Del Frisco's Grille brands, boasts more than 30 restaurants across the U.S.

This Zacks Rank #3 (Hold) company continues to focus on its expansion plans. Del Frisco's Grille will continue to be the core growth driver for the group since the concept is generating solid sales volume. The company will focus on its two other brands, Del Frisco's Double Eagle and Sullivan's Steakhouses, beyond 2013.

All its Grille units have been well-accepted in various markets. The latest Del Frisco's Grille restaurant, located in Santa Monica, marks the second of the company’s 6 targeted openings for fiscal 2013.

A strong lunch day-part and an upscale young guest base drive the brand.  Hence, management is looking for dynamic markets to beef up its Grille portfolio.  The upcoming Del Frisco Grilles will be opened in Fort Worth and Southlake, Texas; Boston, Mass. and Palm Beach, Fla.  

Spread across approximately 6,400 square feet, the Santa Monica unit with its ocean views, contemporary ambience, hand-crafted cocktails and upscale menus is expected to drive considerable sales for Del Frisco's.

We believe that the core California market, which was badly hit during the housing downturn, has begun to turn around. The gradual recovery of this market has not escaped Del Frisco's notice. The state has the potential to generate about $67.4 billion in restaurant sales in 2013, as per the National Restaurant Association.

However, we believe Del Frisco's Grille might face competition from BJ’s Restaurants Inc.’s (BJRI) in the California market. BJ’s also operates in the same segment (bar and grill) as Del Frisco's Grille but with much larger exposure to the market. BJ’s Restaurants currently operates more than 60 restaurants in California..

Some companies from the restaurant sector that are worth a look include AFC Enterprises Inc. (AFCE), and The Cheesecake Factory Inc. (CAKE) both carrying a Zacks Rank #2 (Buy)

Read the Full Research Report on CAKE

Read the Full Research Report on BJRI

Read the Full Research Report on AFCE

Read the Full Research Report on DFRG

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