Bear of the Day: Bravo Brio (BBRG) - Bear of the Day
03 December 2013 - 10:29PM
Zacks
Consumers have not been kind to the casual dining chains in 2013.
Bravo Brio Restaurant Group, Inc. (BBRG) recently lowered
2013 guidance due to the competitive market. This Zacks Rank #5
(Strong Sell) is finding "upscale affordable" to be a hard sell.
Bravo Brio operates two Italian restaurant brands,
BRAVO! Cucina Italiana and BRIO Tuscan Grille, in 31 states across
the country. BRIO is its bigger concept, with 56 restaurants
whereas BRAVO! has 47 restaurants. It also operates one Bon Vie
restaurant.
It has a big focus in its home state of Ohio as
well as in Florida.
Bravo Brio markets itself as "upscale affordable"
but this segment of the restaurant market has been challenging in
2013.
Missed the Zacks Consensus in the Third
Quarter
On Nov 5, Bravo Brio reported its third quarter
results and missed the Zacks Consensus for the second quarter in a
row. Earnings were $0.11 compared to the consensus of $0.14.
While revenue rose 0.4% to $96.3 million,
comparable restaurant sales dipped 4.5%.
Both chains were weak, with comparable restaurant
sales down 3.7% at BRAVO! and 5.1% at BRIO.
Margins eroded and competition picked up in several
of its markets.
Guidance Lowered for 2013
Given the third quarter results and projections for
the fourth quarter, Bravo Brio lowered its EPS and revenue guidance
for 2013.
Revenue is now expected in the range of $410-$413
million, down from $414-$420 million.
Earnings are forecast to be between $0.78 to $0.81,
down significantly from the prior guidance of $0.83 to $0.89.
Bravo Brio will also open 8 restaurants in the
year. It provided preliminary guidance for 2014 of between 6 and 7
new openings.
Shares Have Fallen
Shares of Bravo Brio have fallen since the summer
but even with the sell off, the company is still trading at 20x
forward estimates.
That's more expensive than the S&P 500 at
16.7x.
Investors who REALLY want to be in a restaurant
stock might want to consider alternatives to Bravo Brio like
Buffalo Wild Wings (BWLD). While it is not immune to the
choosy consumer, falling chicken wing prices are helping boost
margins.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades
are about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called Zacks
Confidential.
Learn More>>
Tracey Ryniec is the Value Stock Strategist for Zacks.com.
She is also the Editor of the Turnaround Trader and Value Investor
services. You can follow her on twitter at @TraceyRyniec.
BRAVO BRIO RSTR (BBRG): Free Stock Analysis Report
BUFFALO WLD WNG (BWLD): Free Stock Analysis Report
To read this article on Zacks.com click here.
Buffalo Wild Wings, Inc. (delisted) (NASDAQ:BWLD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Buffalo Wild Wings, Inc. (delisted) (NASDAQ:BWLD)
Historical Stock Chart
From Jul 2023 to Jul 2024