The past winter put a damper on sales growth across the restaurant industry leading into this year, but several brands presenting at the 2014 Baird Growth Stock Conference nonetheless gave bullish projections for the rest of this year to investors.
Executives from Buffalo Wild Wings Inc., Chuy’s Holdings Inc., Ignite Restaurant Group Inc., Noodles & Company, Potbelly Corp., Texas Roadhouse Inc. and Zoe’s Kitchen Inc. detailed their plans for resuming sales and margin growth by managing through commodity inflation and beating their competition to the best real estate sites in new markets.
Presentations to investors at the Baird Growth Stock Conference touched on three common themes:
Though negative impacts from severe winter weather persisted into January and February, many of the executives presenting at the conference nonetheless were upbeat that their restaurant chains could achieve their modest targets for revenue growth in 2014.
“The overall tone from restaurant management teams in attendance was reassuringly upbeat regarding current demand trends and the general outlook for upcoming periods,” David Tarantino, the restaurant analyst for Robert W. Baird & Co. who led the companies’ presentations, wrote in a research note summarizing the conference.
Potbelly Corp., for example, had a difficult winter, chief executive Aylwin Lewis told attendees. The government shutdown in October cut the chain’s business in Washington, D.C., in half, and then 37 out of the 91 days in the first quarter had severe weather affect traffic, he said. But the fast-casual sandwich chain is bullish about its chances to grow sales and expand into new markets, including its next “hub city,” Denver.
“I believe if we run our playbook, we’re kind of impervious to competition,” Lewis said. “It’s our people, product and place. … We don’t find ourselves acquiring customers. Our customers come, and we keep them.”
Potbelly is targeting long-term annual unit growth of at least 10 percent, based on annual same-store sales growth in the low single digits and restaurant-level margins around 20 percent, he said.