We're Eating Out Again

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We're eating out again.

There were a few encouraging reports out of the restaurant industry served up after yesterday's market close.

Buffalo Wild Wings may have come up short on the bottom line for the fourth quarter in a row, but comps are picking up nicely at the chain of family-friendly sports bars.


After the company checked in with modest same-store sales during the first three months of the year, store-level activity turned up dramatically after the quarter ended last month. Buffalo Wild Wings is reporting that April comps rose 5.2% at company-owned locations and an even heartier 5.8% at its franchisee-run eateries.

It's not just Buffalo Wild Wings.

Shares of Texas Roadhouse opened 9% higher today after it clocked in with a strong report last night. The casual steakhouse chain is reporting comps growing 3.5% at company restaurants and 4.5% at franchised locations.

Just like with Buffalo Wild Wings, last month was even better for Texas Roadhouse. Same-store sales at the roadhouse-themed steakhouse soared 5.7% during the four weeks since March 26.

Even a laggard is pointing to improvement.

Bravo Brio Restaurant Group saw comps slide 1.6% at BRAVO! Cucina Italiana and a steeper 3.2% drop at Brio Tuscan Grille. However, the midpoint of its comps guidance for all of 2013 suggests that the operator of modestly upscale Italian restaurants will check in with positive same-store sales for the balance of the year.

The trend is encouraging, but investors need to understand that this is just one variable. Comps are a great indicator of concept popularity, but it's ultimately up to the restaurateurs to milk a profit out of the increase or decrease in store-level sales.

Buffalo Wild Wings will always be at the mercy of fluctuating chicken wing prices, and every eatery is ultimately at the mercy of its customers accepting any price increases that are passed along to them.

Casual dining appears to be holding up in recent weeks, but there's still so much that can go wrong on the way down to the bottom line.

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The article We're Eating Out Again originally appeared on Fool.com.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Buffalo Wild Wings. The Motley Fool owns shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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