Investors are getting their appetite back for restaurant stocks as they smell the early signs of consumers picking up menus and dining out again.
Optimism that restaurants will keep filling their tables has boosted shares of Chipotle, DineEquity and BJ's Restaurants 141%, 89% and 87% this year, far outdistancing the 6% rise in the Standard & Poor's 500. Other large food chains are seeing big jumps in their stocks, too, with McDonald's and Starbucks at the highest prices in more than a year.
The rise in restaurant stocks isn't just because of hope and speculation. Sales at chain restaurant locations open at least a year have grown for three months straight, the first time that's happened in three years, says Lynne Collier, analyst at Sterne Agee.
The recovery in restaurants comes a year after the stocks were in free-fall as diners of all income levels cut back on eating out to save money just in case the economy got worse. "Things fell apart" for restaurants, Collier says. "But things have gotten better."
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