CAKE - Why Cheesecake Factory BJ's Restaurants and Bloomin' Brands Stocks Fell 10% (or More) This Morning
It's Wednesday, and restaurant stocks are in free fall. As of 12:40 p.m. EDT, shares of The Cheesecake Factory (NASDAQ: CAKE) are down 8.1%, BJ's Restaurants (NASDAQ: BJRI) has fallen 9.2%, and Bloomin' Brands (NASDAQ: BLMN) is positively wilting -- down 10.2%. Why?
There are a couple of specific factors at play in the restaurants sector today -- and one broad theme that could be dragging the rest down. Specifically, Bloomin' Brands suffered a reduction in price target this morning, with analysts at Loop Capital (reports TheFly.com) cutting the shares' estimated value to $15. That sounds like bad news, but in fact, Loop notes that it's actually positive on the Outback Steakhouse operator's fortunes (and rates the stock a buy).
Same-store sales dropped 63.5% at Outback in late March but were down only 38% in the first week of May and appear to be trending toward "just" a same-store sales decline of 17% in the past week. Thus, Bloomin' Brands is a story of things being bad... but getting gradually less bad over time.