Chipotle Mexican Grill Inc and Panera Bread Co reported quarterly results that outshone their peers as many restaurants continue to struggle during a slow U.S. economic recovery.
Both are relatively new chains that are rapidly adding more restaurants. They have found a following among diners who are willing to pay a bit more for quick meals made with upscale ingredients like naturally raised meats and artisan cheese.
Chipotle and Panera have chalked up 12-month gains of about 160 percent and 40 percent, respectively, on industry-leading sales trends, and investors have wondered how long their outperformance would last.
Chipotle, which features organic and natural ingredients, on Thursday said fourth-quarter sales at established restaurants jumped 12.6 percent, an acceleration from the 11.4 percent climb in the prior quarter.
The Denver-based burrito chain also reported quarterly profit that topped Wall Street's view and repeated its forecast of a low-single-digit percentage gain in 2011 same-store sales.
Shares in the company -- now facing a widening federal crackdown on its undocumented work force -- rose 8.6 percent to $278.80 in extended trading.
Panera, which serves lavish sandwiches, salads and pastries, said same-store sales at company-owned bakery-cafes rose 5.2 percent in the fourth quarter.
The company on Thursday reported fourth-quarter profit above analysts' average view, boosted its full-year earnings forecast and called for 2011 same-store sales growth of 4 to 6 percent. Panera's shares jumped 10.5 percent in extended trading.
Results from another high-flying restaurant chain, BJ's Restaurants Inc, disappointed with a quarterly profit that just matched Wall Street's view. Its shares, which are up 85 percent over the past year, fell 4.2 percent to $37.07.
The restaurant and brewery operator said sales at established restaurants rose 5.9 percent during the fourth quarter and were up by roughly the same amount so far this quarter.
California Pizza Kitchen Inc and Cheesecake Factory Inc also reported better-than-expected quarterly earnings on Thursday, but their sales trends lagged.
California Pizza Kitchen reported a 1.1 percent decline in sales at established full-services restaurants, while Cheesecake Factory said same-restaurant sales at its namesake eateries rose 1 percent. Shares in those chains were unchanged in extended trading.
After years of cutting back, diners are venturing out for meals away from home more often. But consumer spending remains cautious and it's not yet known how much restaurant operators will be able to raise menu prices to offset higher costs for food like beef, dairy, cooking oil and produce.
Chipotle executives said they would likely raise menu prices later this year to cover their higher bill for food.
We expect continued inflationary pressure on many of our ingredients, especially chicken, beef and avocados, during the year, Chipotle Chief Financial Officer Jack Hartung said on a conference call with analysts.
McDonald's Corp last month said it would hike prices where it makes sense to offset some but not all of its higher food costs.
Starbucks Corp already has raised some U.S. drink prices to offset soaring coffee prices. Starbucks' CFO told Reuters on January 26 that it had not yet seen any meaningful resistance to the drink price hikes.
(Additional reporting by Renju Jose in Bangalore; Editing by Gary Hill)