Rethinking an idea
In an April edition of the Milwaukee Journal Sentinel, I recommended the Cheesecake Factory (CAKE) and Panera Bread (PNRA).
Cake hasn't fared well since the article interview: down 21%. Ouch. What did I miss?
The company isn't growing like it was, and there is a very simple reason why: patrons are no longer willing to endure the waits associated with eating at CAKE. It's not the food - the food is still delicious. What I believe is going on is that the company isn't growing its store base fast enough. The newer stores tend to drive same-store sales growth AND top-line growth. The days where these establishments increase same-store sales at a rapid pace is ending - the newness is wearing off.
The story is changing...and I would steer clear of CAKE.
Meanwhile, the Panera story remains in tact. We just need a bit of a sale in the stock.
posted by rvb1977 @ 6:17 PM
2 Comments:
Hey RVB,
This could be another contributing factor:
http://retail.seekingalpha.com/article/13074
Thanks, Mick
It's interesting that the sit-downs are getting pummelled. Chipotle and Panera continue to roll.
I guess that the lower price points combined with speed mean that these guys are more bulletproof.
Chipotle is a buy on any weakness, as is Panera - which, to me, is almost an outright buy (get it below $65)
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