Smaller Restaurants Are Starving for Sales After Earnings Misses
A customer picks up a food order at a Shake Shack restaurant in New York.
Photographer: Michael NagleRestaurants with some of the smaller market values are leaving investors hungry this earnings season after a year of feasting. Or maybe it’s their larger peers that are eating their lunch.
Eleven of the 21 restaurants in the Russell 2000 Growth Index that reported quarterly results missed revenue estimates by an average of 0.4 percent, according to data compiled by Bloomberg. It’s a sudden setback after two straight quarters with an average revenue surprise of better than 1 percent for the group and could raise concerns for the companies reporting next week, including Jack in the Box Inc. and Papa John’s International Inc., which has had its own set of difficulties recently.