It’s a tough time to be a restaurant group, not just the Restaurant Group (LON:RTN). Yet it hasn’t all been one-way traffic for the company market-wise. Though it got off to a poor start, tumbling from an opening price of £3.02 to a post-Brexit low of £2.30 by early March, it went on a nice little run in spring, hitting a near 8 month peak of £3.25 towards the end of May.
Since then, admittedly, things have been a bit more in line with the news surrounding the mid-tier restaurant sector, with the stock falling to £2.60 by August. Restaurant Group now sits at a current trading price of £2.79.
The firm’s last trading update came in May, and helped send it to that aforementioned 8 month-ish high. Investors were relieved that the company said it would ‘deliver results for the full year in-line with current market expectations’. And while that hardly sounds like the kind of comment that would send a stock 7% higher, it came after news that like-for-like sales had fallen 4.3% and total sales had dropped 3.1% for the 20 weeks to 20th May, the company blaming the adverse weather.
As for Friday’s interim statement, a different kind of weather may pose a problem for the Frankie & Benny’s owner. The summer heatwave, and the World Cup, likely haven’t helped its struggling restaurant division, though they may have given a boost to its expanding pub business. Still, analysts at Numis Securities are expecting a 4% drop in like-for-likes and a 22.6% slide in adjusted earnings to £20.5 million.
Restaurant Group PLC has a consensus rating of ‘Hold’ alongside an average target price of £3.28.
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