Ms. Meyer: The stocks have done very well because same-store sales have improved markedly. Looking at the last six months, in probably five of those months same-store sales have beaten expectations. Since improving same-store sales drive improving returns, that has driven the shares higher.
TWST: Dean, given that scenario, why have same-store sales awakened all
of a sudden?
Mr. Haskell: That's a great question. Same-store sales have improved for
several reasons. On the larger scale I believe the economy is starting
to turn around, and we are seeing people out there spending money and
having a little more fun with their lives. We had easy comparisons last
year with winter weather in February and then the start of the war in
March 2003. We've also had a significant change in the largest player.
McDonald's (MCD) late Chairman and CEO, Jim Cantalupo, came in last year
and took them from being a discount player to being a player with some
premium products. He brought a new attitude and approach toward the
business. That reinvigorated the segment on the QSR side. On the casual
dining side, I think it really boils down to the need for the customer
to have a good time. They're tired of the economy and terrorism and not
having a good time. The money's in their pockets, so they want to go out
and spend it with some friends.
Tickers included in this excerpt: APPB, CAKE, CBRL, CHGO, CKR, COSI, CPKI, DRI, EAT, JBX, MCD, OSI, PEET, PFCB, PNRA, RAR, RARE, RRGB, SBUX, SNS, SWRG, WEN, YUM
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