Breaking Down Restaurant Growth

Restaurants can achieve top line growth two ways: opening new restaurants or(but preferably and) increasing sales at existing locations. Let's see which restaurants are growing and how they are achieving that growth. Just 9 out of 53 restaurants are showing Year over Year Revenue Growth of 15% or higher. (chart 1) Those companies are: ZOES, HABT, CMG, NATH, IRG, BWLD, CHUY, KONA and DRI. NATH and DRI don't have all of the data we want available, so we'll focus on the remaining 7 restaurants moving forward. Looking at restaurant openings, we see just 3 companies(ZOES, HABT, CHUY) with at least 15% growth in the number of restaurants. CMG did not grow at a 15% rate, but the absolute number of restaurant openings(185) is remarkable. (chart 2) Now let's look at same restaurants sales growth. (chart 3) We can see that ZOES is a clear standout in a good way, with total revenue growth > 45% powered by strong same restaurants sales growth of around 7% and as we saw in the last chart strong growth in number of restaurants. This strength has been reflected in their stock price as well, as ZOES is up over 20% in the last year. CMG shows strong same restaurants sales and that along with their 185 new restaurants has helped fuel a 30% increase in the stock over the last year. IRG's total revenue growth of 23% seems unsustainable as same restaurants sales are declining, and growth in the number of restaurants is under 5%. The market seems to agree as IRG is down more than 35% in the past year.