Restaurant Same-Store Sales Guidance Is Broadly Lower

Brett Levy, a restaurant analyst with Deutsche Bank, commented in a research note on Monday that the sales environment for the group remains "challenging," as evident by a notable number of companies that reported a lower than expected same-store sales growth in the second quarter.

Here is Levy's summary of companies that reported a softer than expected same-store sales and/or poor outlook.

• Jack in the Box Inc. JACK lowered the top end of its outlook by around 50 basis points.
• Restaurant Brands International Inc QSR's second-quarter same-store sales print was 150-200 basis points below expectations at Burger King US and Tim Horton's Canada.
• Dunkin Brands Group Inc DNKN reported a weaker-than-expected same store sales for both of its brands but did not adjust its full-year expectations.
• DineEquity Inc DIN "meaningfully" lowered its bottom half 2016 same-store sales outlook for both IHOP and Applebee's.
• Cheesecake Factory Inc CAKE's reported same-store sales print was within management's target but its third quarter and full-year outlook fell short of consensus estimates and "modestly" lower than prior outlooks.
• BJ's Restaurants, Inc. BJRI's reported same-stores sales were "modestly" negative.

Related Link: Deutsche Bank's Q2 Report Cards For 10 Fast-Food/Fast-Casual Stocks

On the other hand, Levy highlighted Domino's Pizza, Inc. DPZ and Papa John's Int'l, Inc. PZZA as being part of the few restaurants that outperformed in the second quarter given their second-quarter same-store sales, which were ahead of consensus expectations.

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