News Column

Restaurant Shares Fall on Domino Miss

October 15, 2013

Associated Press

dominos

NEW YORK (AP) — Shares of restaurant operators and fast-food chains fell Tuesday after Domino's Pizza Inc. was the latest company in the sector to report disappointing earnings.

Concerns the fallout from the government shutdown could keep customers from eating out have also kept shares down.

On Tuesday, the Ann Arbor, Mich.-based pizza delivery chain said that it earned $30.6 million, or 53 cents per share, during its third quarter. Analysts expected it to earn 52 cents per share, according to FactSet.

Its shares fell $3.95, or 5.7 percent, to close Tuesday trading at $64.90. The stock remains up about 49 percent since the start of the year.

Domino's results followed a series of reports showing weak results for other fast-food and casual restaurant chains.

Last week, Ruby Tuesday Inc. posted a first-quarter loss, citing the weak economy. Yum Brands Inc., the owner of KFC, Taco Bell and Pizza Hut, reported third-quarter results that missed Wall Street analyst expectations.

Shares of Ruby Tuesday slipped 10 cents, to end at $6.01 on Tuesday. Yum Brands shares fell $1.14, to $65.80.

The ongoing government shutdown could hurt restaurants. William Blair analyst Sharon Zackfia said in a note to clients Monday that during the last government shutdown in 1995, restaurant sales growth slowed more during the 27-day period than those of other retailers.

When consumers are worried about the economy, they tend to pull back on their spending.

Investors will get a better look at how restaurants and food chains are faring in coming days as a spate of chains are expected to report earnings. Chipotle Mexican Grill Inc. will post results Thursday; McDonald's Corp. on Monday; Panera Bread Co. on Tuesday; The Cheesecake Factory Inc. on Oct. 23; and Dunkin' Brands Group Inc. on Oct. 24.

Here's how those and some other restaurant chains fared on Tuesday:

—Cracker Barrel Old Country Store Inc. fell 99 cents to $105.20.

—The Cheesecake Factory Inc. lost 64 cents to $42.76

—Chipotle Mexican Grill Inc. gave up $8.75, or 2 percent, to $433.27.

—Denny's Corp dipped 9 cents to $6.32

—Dunkin' Brands Group Inc. dropped 23 cents to $46.24

—Darden Restaurants Inc. gained 7 cents to $51.03

—McDonald's Corp. slipped 92 cents to $93.80.

—Panera Bread Co. added 62 cents to $160.55.

—Brinker International Inc. fell 27 cents to $40.45

—The Wendy's Co. lost 17 cents to $8.36.

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Original headline: Sector Wrap: Restaurant shares fall on Domino miss



Source: Copyright 2013 The Associated Press. All rights reserved.