This morning on The Call @ Hedgeye, our Consumables Analyst Howard Penney and Hedgeye CEO Keith McCullough discussed Chili's recent viral success on TikTok, driven by its effective marketing strategy. Penney added the stock to his Best Idea Long list on August 17, 2023, when it was trading at $34. The stock has since doubled.
As Penney explains, Chili's has shown that even legacy brands can thrive on TikTok by focusing on consistency, leveraging the platform’s best practices, and partnering with the right influencers.
“I still love this stock,” Penney explained. “I still think there's more room to run for Chili's just because they've been revamping the marketing strategy. Obviously for a 50-year-old chain like this to become a TikTok viral sensation is pretty extraordinary. And George Felix, who is the CMO, deserves a lot of credit for all this.”
“I think there’s still more room to run for Chili’s,” he added.
McCullough couldn’t contain his amusement at the impressive numbers Chili’s is posting.
“I’m laughing because you and I have covered this together, restaurants, for over 20 years,” McCullough replied. “For those of you that don't know, I was a restaurant analyst on the buy side—Howard was at Morgan Stanley. And this company has been around pretty much the whole time. And I'm giggling because, I don't think I've ever heard a traffic number that high at Chili's. And that's including when it was a growth concept.”
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