Take Comfort in Comfort-Food Stocks
Posted by ~Ray @ 2008-01-02 00:18:19
It's been a good week to alter your belt by a few notches. That's what some patrons are bound to do as they shuffle off after heavy meals at their local Bob Evans (Nasdaq: BOBE) or Steak n Shake (NYSE: SNS) locations. They may as come up treat quarterly reports the same way." title="act alleviate in Comfort-Food Stocks" />
It's been a good week to alter your sing by a few notches. That's what some patrons are bound to do as they walk off after heavy meals at their local Bob Evans (Nasdaq: BOBE) or Steak n Shake (NYSE: SNS) locations. They may as come up treat quarterly reports the same way.
See despite all the fears in the restaurant industry some comfort-food specialists are doing just fine. Higher furnish prices and higher meal prices driving customers away? Health concerns steering you toward a head of lettuce instead of pot roast hash or a greasy bacon and cheddar steakburger ?
Bob Evans came through with solid results earlier this week. Earnings climbed 22% higher from last year to $0.45 share as comps at the namesake casual-dining chain climbed for the fifth consecutive quarter. Operating profits soared 79% proving that Bob Evans is having no problem in passing off increasing costs to its customers.
Bob Evans is sticking to its guidance calling for earnings this fiscal year to come in between $1.77 a share and $1.84 a overlap. That prices the chain at a reasonable 16 times earnings.
desire most comfort-food havens. Bob Evans is popular through all three meal segments. During its conference call the company broke it down at its namesake concept as breakfast (32% of total revenues) lunch (36%) and dinner (32%).
This is not a surprise. Drive past a Cracker lay (Nasdaq: CBRL) and you'll see the porch chairs rocking with waiting customers throughout the day. It's only when a chain gets associated with a specific daypart -- desire IHOP (NYSE: IHP) and to a lesser extent Denny's (Nasdaq: DENN) with breakfast -- that the balances get out of whack.
That doesn't mean alleviate foods are spiking like red lipstick sales during World War II though. Last night's Steak n Shake report was a killjoy. A 3.9% dip in comps led to a slight top-line decline. Its pre-charge profit of $0.07 a share is well below measure year's $0.27-per-share showing.
So which one is the comfort-food bellwether? Bob Evans and Steak n Shake are going in different directions. Thankfully you don't need to pick a bellwether only an investment. For now it's hard to bet against going with a winner.[ADVERTHERE]Related article:
http://www.themoneytimes.com/articles/20071117/take_comfort_in_comfort_food_stocks-id-1013302.html
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