Bojangles Inc BOJA is only one of a group of newly-public restaurant stocks that are struggling to gain their footing in the market. The stock is down more than 38 percent since its 2015 IPO, mirroring the underperformance of other recent restaurant IPOs Wingstop Inc WING and Shake Shack Inc SHAK.
According to Bojangles CEO Clifton Rutledge, Bojangles has been facing unprecedented competition and pricing pressures from restaurant rivals, led by McDonald's Corporation MCD.
"McDonald's has taken some share," Rutledge admits to The Street's Brian Sozzi. "There has been a good bit of discounting from McDonalds, Wendy's and Burger King and we have been forced to respond."
Related Link: Wendy's Calls Burger King Inedible In Twitter Feud
Not only has Bojangles all-day breakfast biscuit business been impacted by McDonald's shift to its own all-day breakfast menu, value promotions like the "McPick 2" deal have prompted similar value promotions from Restaurant Brands International Inc QSR's Burger King, Dominos Pizza, Inc. DPZ and Yum! Brands, Inc. YUM.
Bojangles is also trying to keep pace by recently steeply discounting its steak biscuits from $1.89 to $0.99.
Disclosure: the author holds no position in the stocks mentioned.
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