In April, we had several chain restaurants report: McDonald’s, Chipotle, Starbucks, Brinker, Burger King, Panera, Buffalo Wild Wings and others. And despite the “open efficient market knowledge and sophisticationâ€, we are still talking about bad weather as a driving influence for some (BKC, for one).
While all businesses are sensitive to incremental revenue and operating leverage, restaurants are more so, as somewhere between 35 to 50% of incremental sales should drop through to the bottom line. When you hear some restaurant analysts talk (see Brad Ludington, KeyBanc CNBC interviews in April), every other word is same store sales.
Based on how quickly these stocks can move (think BWLD down $10 in a week) and hinge on a single number, some reforms are needed in the disclosure. More.
