 |
 | April 11, 2011, 08:00 EST |  |   |
|
 | |
| Why Bob Dylan Is A Sign Of TheTimes.. Again | |
 | Market Moves |
| Dine Equity (NYSE: DIN) Slips As OilPrices Surge Shares of Dine Equity (NYSE: DIN),Brinker International (NYSE: EAT) and Cheesecake Factory (Nasdaq: CAKE)fell hard on Friday, as oil prices put on the afterburners. McDonald's(NYSE: MCD) sidestepped the whole thing. Chart Courtesy of Dine Equity, home to Applebee's and IHOP is an interesting combination,as it encompasses the low end and the mid-range of casual dining. Theseare the restaurants where cost conscious families and individuals oftenlook for bargain menus and value. Yet, the market is saying that eventhat segment of casual dining is going to suffer due to higher gasolineprices. Brinker International has a broad array of brands, from Chili's whichcompeteswith Applebee's, to Magianno's, which competes with the upscaleCheesecake Factory.But again, the market is taking the whole segment down. History does have a nice correlation between higher oil prices andlower restaurantstocks. So far, McDonald's, the bargain basement, and the mostconsistent ofthe casual dining group is not being affected. That makes sense, giventhe factthat McDonald's continues to operate a lean profit machine, whichshould benefitif oil prices continue to climb and penny pinching by consumers has toreacha new level of frugality. We stopped at a Cheesecake Factory on Sunday evening, around 5:30 andhad togo to a restaurant next door as the wait was too long. The otherrestaurant,a locally owned chain had one half of its dining capacity closed, whilethe opendining room was three quarters full. We may have reached that point in the cycle where gasoline prices arestartingto crimp the casual dining sector. |
