Restaurants Match Stock Market Performance


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Despite a presidential election, problems in Europe and fiscal cliff concerns, investors generally had a good 2012. For all of that volatility, the S&P 500 finished with its best increase in three years, up more than 13 percent for the year. The restaurant industry mostly matched this growth.

On average, and not weighted for size, restaurant stocks we track rose more than 13 percent in 2012. Most stocks saw improvement, and several concepts that had been struggling since the recession had breakout years.

In fact, some of the heretofore best performing restaurant companies on Wall Street fell last year. Chipotle, whose stock at one point traded in the 400s, saw its stock fall nearly 12 percent last year. McDonald’s saw a similar 12 percent drop. BJ’s Restaurants, previously among the best performing casual dining concepts, declined 27.41 percent. Einstein Brothers Bagels fell 22.82 percent. Then there’s Pizza Inn: its stock doubled in 2011, and then gave back a chunk of that gain in 2012, falling 37.64 percent. Still, on a two-year basis, the Texas-based pizza company’s stock is up 75.9 percent. (We’ll have more analysis of the 2012 market for restaurant stocks in the upcoming issue of The Monitor.)

Meanwhile, Sonic stock rose 54.68 percent. Krispy Kreme stock rose 43.43 percent. Both chains’ stock fell the previous year and had been struggling in recent years but seemed to turn things around in 2012.

The best performing restaurant stock in 2012, was AFC Enterprises, known mostly as Popeyes. The price for a share of the Atlanta-based chicken chain rose 77.76 percent. Only the penny stock Good Times Burgers, which doubled to $2.31 a share, performed better. Popeyes stock has been growing as the chicken chain keeps taking market share away from its bigger rival, KFC.

Perhaps the most remarkable story, however, belongs to Domino’s Pizza. The Michigan-based pizza delivery concept has been on a major comeback in recent years. Last year, its stock rose 28.28 percent. On a two-year basis, however, its stock is up 173.04 percent. In other words: if you bought $1,000 worth of Domino’s stock just two years ago you’d have $2,739 right now.

Indeed, the pizza sector of the restaurant business continues to outperform everybody else. Consider: Papa John’s stock rose 45.78 percent last year and over two years has nearly doubled. Among publicly traded pizza chains, only Chuck E. Cheese (down 15.29 percent) has fallen on a two-year basis. Consumers still like pizza, and apparently, so do investors.

 

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