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We’ve been bearish on the casual dining sector since early June and, on Friday, Black Box gave us a look at August sales trends which showed little improvement from an ugly July.

Black Box reported that August 2013 same-restaurant sales declined -0.2%, while comparable traffic trends declined -1.9%—both metrics accelerated 70 bps and 30 bps on a sequential basis, respectively.  These estimates come against August 2012 comps of +1.0% and -1.1%, respectively.

Malcolm Knapp also released his August 4-week estimates this weekend.  Knapp-Track casual dining same-restaurant sales declined -1.7%, while comparable guest counts declined -3.1%.  These results come against full 5-week August 2012 comps of +1.0% and -1.2%, respectively.  Knapp will release his 5-week August estimates later this week.

Currently, consensus estimates for the 24 casual dining chains we track in the space are for 3Q13 same-store sales growth of +1.2% (excluding the DRI brands) versus +1.7% in 2Q13.  For the first two months of 3Q13, Black Box has reported same-store sales of -0.6%.

With September traditionally being a difficult sales month given the back-to-school trends, it is unlikely we will see a significant uptick in same-store sales.

The following companies saw SSS revised down over the past month: BWLD, CBRL, DRI, EATRT.

The following companies saw SSS remain unchanged over the past: BJRI, CAKE, DIN, RRGB, KONA, RUTHTXRH.

CASUAL DINING TRENDS REMAIN WEAK - BBOX chart1

 

CASUAL DINING TRENDS REMAIN WEAK - BBOX chart2

 

CASUAL DINING TRENDS REMAIN WEAK - BBOX chart3

Howard Penney

Managing Director