4 or 5 years ago, I thought RRGB was a big short, and was right. I liked BJRI. You can read my articles on Seeking Alpha if you care what I was thinking then. Just recently, I took a fresh look when it hit a screen I ran on the industry.
RRGB has a new CEO from El Pollo Loco. He has a smart plan and is executing. The key points are to change up the size of new stores to include some smaller ones, focus on expanding the bar and changing the menu to include a value offering but also several upsells. They are doing lots of other things to improve operations - this is primarily a margin expansion story, but with new store openings too.
This quarter, they beat on EPS but sales were a little light. They did a poor job advertising their new tavern burger limited time offer, and traffic was weak. Encouragingly, their customers spent more. To me, this looks like a short-term phenomenon in terms of traffic. It sounds like they are being somewhat conservative on their sales outlook, but the EPS growth will likely be similar to what was previously expected.
The stock has traded down to about 32 - now bid a bit higher. I think that this could be a great entry into a reasonably priced improving story. Between 31.50 and 33, this is "Treasure"
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