I know it’s hard to invest in consumer stocks right now; it’s better to invest in investment-oriented companies. However, I believe this is the bottom of the BBQ business. There will be 30 more restaurants coming this year, 15 from Salt and Toscano (these will do well), and 15 from BBQ Nation (only 1-3 abroad). These will contribute to growth. Furthermore, there has been an improvement in operational efficiency. Last quarter, margins improved even though it was their best quarter every year. I actually see it as an improvement in business, and promoters say they’ll sustain most of the margin.
I would tell you it’s hard to estimate demand, and I’m sure it’s weak. But my vision is very long-term. I do think a change in the mindset of people and local competition soon will decrease, contributing to growth. I do believe next quarter we might see improvement in SSSG (just through going through thousands of Google reviews and calculating with their best year). But still, demand is hard to predict, and yes, it’s weak.
Subscribe To Our Free Newsletter |