3 More Restaurants Growing Faster Than Chipotle
Chipotle Mexican Grill is the golden standard in fast casual. Everything seems to be growing at a heady clip, and that was on display in its mostrecent quarterly report.
However, with growth decelerating at Chipotle -- year-over-year revenue climbed is at its lowest pace in years and quarterly comps of 4.3% ended a streak of five straight periods of double-digit growth -- investors may be wondering if there are publicly traded restaurant chains growing faster.
Spoiler alert: There are faster companies out there. A month ago, I went over three eateries that posted stronger comparable-restaurant sales growth. Now that we've had a few more earnings report trickle in, let's go over some more restaurant operators coming through with better comps than Chipotle.
Dave & Buster's -- up 11%The second time around as a public company has played out well for Dave & Buster's. The chain of mammoth-sized restaurants complete with arcades has seen its stock more than double since going public -- again -- late last year, and traffic continues to grow for the "eatertainment" leader.
The 11% year-over-year spike in comps is the combination of a 12.1% increase in walk-in sales that was held back by a mere 2.2% in special event sales. In other words, the retail popularity of Dave & Buster's is growing even faster than the comps tally suggests.
One can argue that Dave & Buster's isn't a true restaurant. Food and beverage sales actually make up less than half of its revenue. The big driver here is its arsenal of video games and prize-redemption diversions that generate juicy high-margin revenue. It doesn't matter. Dave & Buster's is rolling.
Habit Restaurants -- up 8.9%Most burger lovers were probably taken by surprise when aConsumer Reports surveylast year polled tens of thousands of fast food buffs to rate different chains on quality. The top dog in the burger category wasn't cult faves Five Guys or In-N-Out. The chain with the best quality score for hamburgers was The Habit Grill.
The Habit Grill's company went public just a few weeks after Dave & Buster's hit the market late last year. Customers keep coming, judging by the 8.9% spurt in comps. Margins have been a challenge for the chain of 117 company-owned units, but it's coming off of back-to-back quarters of better than expected profitability.
Texas Roadhouse -- up 8.2%Casual steakhouses aren't the hot concepts they were in the 1990s, but Texas Roadhouse is making the most of its peanut shell-littered bastions of comfort food. Whether it's the signature yeast rolls that are served on arrival or the value-priced steaks, carnivores continue to flock to Texas Roadhouse in greater numbers.
Comps climbed 8.2% in its latest quarter, but not everything is perfect. Rising beef costs have taken a bite out of margins in the near term, but Texas Roadhouse isn't having a problem passing along the increases to its steak knife-wielding patrons.
Chipotle is clearly still a market darling, but it's not the only one that's doing a great job of wooing customers.
The article 3 More Restaurants Growing Faster Than Chipotle originally appeared on Fool.com.
Rick Munarriz owns shares of Habit Restaurants. The Motley Fool owns and recommends Chipotle Mexican Grill. The Motley Fool recommends Dave & Buster's Entertainment and Texas Roadhouse. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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