Bojangles' Stock Leaves a Bad Taste Ahead of Earnings

NEW YORK (TheStreet) --  Bojangles  (BOJA) will announce its first quarterly earnings report as a public company Thursday after the closing bell. Investors aren't sure what to expect from the purveyor of Cajun chicken and biscuits so the best recipe is to be cautious because this is a stock that is down around 11% since the start of June.

The stock is down some 14% from since its initial public offering high of $28.45 so investors should stay cool. In a sector dominated by Yum! Brands' (YUM) KFC chicken chain and Popeyes Louisiana Kitchen (PLKI), the average analysts is no longer boasting about how dominant Bojangles can become. Reality has set in.

The Charlotte-based southern restaurant chain, which went public in May, has joined the ranks of restaurants like Shake Shack (SHAK) and El Pollo Loco (LOCO) looking to capitalize on the industry's recent momentum. For instance, shares of Shake Shack are up almost 70% since its initial public offering last December.

Not wanting to miss out on the next possible Chipotle Mexican Grill (CMG), however, investors have quickly bought into these "hot IPOs" and their aggressive growth plans. The promise of sustainable double-digit same-store sales growth is too much to pass up, investors fear. But not every menu can win -- not when these restaurants are fighting for the same locations, at the same time and from the same consumer.

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