NEW YORK (The Street) -- To satiate the appetite of investors hankering for strong profits, newly minted IPO Bojangles (BOJA) will have to dish out even more of its fan-favorite biscuits while thwarting some formidable foes who also specialize in the homey treat.
"Biscuits remind people of their grandmothers -- there's something very old-fashioned and simple about a great biscuit that puts people in a good mood," said Patty Scull, director of catering and events at Pies 'n' Thighs, a Brooklyn, N.Y., restaurant that also specializes in biscuits.
Bojangles arguably based its entire IPO roadshow on its knack for selling biscuits stuffed with meat and slathered in gravy. "The food is our star," CEO Clifton Rutledge told TheStreet TV. In early trading Friday, investors sent shares of Bojangle's up 47% to $27 a share from its IPO price of $19 a share. Shares closed at $23.75.
According to its April 27 prospectus, Bojangles estimated comparable-store sales rose between 7.9% and 7.6% in the first quarter. That's significantly better than the 1.7% rise recorded in last year's first quarter. The chain, founded in 1977 in Charlotte, N.C., records 38% of its sales before 11 a.m., Rutledge said.
At a time when fast food giant McDonald's (MCD) is faltering among consumers for unhealthy options and poor ingredient quality, and competitors like Chipotle (CMG) are thriving by selling "healthier" eats, the popularity of biscuits seems odd. "We'll always make room for those high-calorie items that give us something more than just a delicious taste," said Scull. "A lot of that ties into foods that evoke some kind of nostalgia or comfort." Bojangle's biscuits are baked fresh every 20 minutes, according to a 48-step recipe, and served around the clock.
Can Bojangle's satisfy Wall Street's craving for ever higher quarterly earnings by persuading more people to consume its biscuits at every hour of the day? That will depend in part on the competition. TheStreet takes a look at several of Bojangle's competitors in the business of hawking biscuits, listing calorie counts and nutrition numbers for each chain's main offering. The items are ranked with the most caloric last.
1. Red Lobster
Item: Cheddar Bay Biscuit
These biscuits are served at the table as a side and evoke Maryland-style seafood dinners more than southern biscuits with gravy.